PagerDuty 2026 Q1 Earnings Narrowed Losses as Net Income Improves 57%

PagerDuty, Inc. (PD) reported its fiscal 2026 Q1 earnings on May 29th, 2025. The company showed a notable improvement by narrowing its net income loss by 57%, signaling positive financial progress. Revenue for the quarter reached the upper end of expectations at $119.81 million, reflecting a 7.8% year-over-year increase. In terms of guidance, PagerDuty anticipates growth with revenue predictions for the next quarter ranging between $122.5 million and $124.5 million, indicating a 6% to 7% rise. The company aims to achieve a net income per diluted share of $0.19 to $0.20, showcasing confidence in its strategic growth initiatives.

Revenue

PagerDuty reported a total revenue increase of 7.8%, reaching $119.81 million in fiscal Q1 2026 compared to $111.17 million in Q1 2025.

Earnings/Net Income

PagerDuty has narrowed its losses significantly, reporting a loss of $0.07 per share in Q1 2026, a substantial improvement from the $0.26 per share loss in Q1 2025, representing a 73.1% enhancement. The company also reduced its net loss to $7.38 million, a 57.5% improvement from the $17.34 million loss reported in the previous year. The reduced EPS loss indicates positive financial developments.

Post-Earnings Price Action Review

The strategy of acquiring PagerDuty shares after a quarterly revenue drop on the financial report release date and maintaining them for 30 days has proven ineffective. The approach yielded a disappointing return of -44.38%, significantly trailing the benchmark return of 39.33%. The excess return stood at -83.71%, and the compound annual growth rate (CAGR) was -17.93%, highlighting substantial losses over the three-year period. Additionally, the strategy experienced a high maximum drawdown of -62.17% and a Sharpe ratio of -0.35, indicating considerable risk and negative returns. These figures underscore the challenges faced by investors employing this particular strategy and emphasize the need for a reassessment to mitigate risks and enhance potential returns.

CEO Commentary

Jennifer Tejada, Chairperson and CEO, highlighted PagerDuty's achievement of $120 million in revenue, reflecting an 8% growth, and surpassing non-GAAP operating margin targets at 20%. Tejada pointed out execution challenges due to sales team transitions but noted strong demand from new logos, particularly in native AI. She emphasized a strategic focus on enhancing enterprise relationships and scaling AI capabilities, expressing confidence in achieving GAAP profitability and leveraging the Operations Cloud for future growth.

Guidance

For Q2 FY2026, PagerDuty projects revenue between $122.5 million and $124.5 million, anticipating a growth rate of 6% to 7%. The company expects net income per diluted share to be between $0.19 and $0.20. For the full fiscal year 2026, PagerDuty forecasts revenue ranging from $493 million to $499 million, indicating growth of 5% to 7%, with net income per diluted share expected between $0.95 and $1.00, implying an operating margin of 20% to 21%.

Additional News

In recent developments, PagerDuty renewed its Strategic Collaboration Agreement with Amazon Web Services (AWS) on May 13, 2025, aiming to enhance automation and operational resilience for organizations. Additionally, the company appointed a new member to its Board of Directors, Donald Carty, in collaboration with Scalar Gauge Fund on April 28, 2025, reflecting strategic leadership expansion. Furthermore, PagerDuty was named a leader and outperformer in GigaOm Radar for IT Incident Response Platforms for the third consecutive year on April 8, 2025, showcasing its continued excellence in digital operations management.