PagerDuty 2026 Q1 Earnings Net Loss Narrows by 57.5%

PagerDuty (PD) reported its fiscal 2026 Q1 earnings on May 30th, 2025. The company surpassed revenue expectations with a reported total of $119.81 million, marking a 7.8% increase compared to the previous year. Despite narrowing its losses significantly, earnings per share fell short of analyst expectations. For Q2 fiscal 2026, PagerDuty issued guidance that aligns with market predictions, expecting revenue between $122.5 million and $124.5 million. The company remains focused on strategic improvements to achieve GAAP profitability in the near future.

Revenue

The total revenue of PagerDuty increased by 7.8% to $119.81 million in 2026 Q1, up from $111.17 million in 2025 Q1.

Earnings/Net Income

PagerDuty narrowed losses to $0.07 per share in 2026 Q1 from a loss of $0.26 per share in 2025 Q1 (73.1% improvement). Meanwhile, the company successfully narrowed its net loss to $-7.38 million in 2026 Q1, reducing losses by 57.5% compared to the $-17.34 million net loss reported in 2025 Q1. The EPS improvement was significant, showcasing progress in the company's financial management.

Price Action

The stock price of PagerDuty has dropped 4.84% during the latest trading day, has tumbled 11.10% during the most recent full trading week, and has tumbled 9.35% month-to-date.

Post-Earnings Price Action Review

The strategy of buying PD shares when there is a revenue miss and holding for 30 days has proven to be ineffective, as demonstrated by a backtest revealing a substantial loss of -55.74%. This approach resulted in an excess return of -139.62% and a Sharpe ratio of -0.26, indicating poor risk-adjusted performance. Moreover, the strategy experienced a maximum drawdown of -77.62%, highlighting significant volatility with a rate of 59.12%. These results suggest that the strategy carries high risk and potential for considerable losses, cautioning investors against employing it without further assessment and adaptation to current market conditions.

CEO Commentary

Jennifer Tejada, Chairperson and Chief Executive Officer, remarked on PagerDuty's performance, stating, "In the first quarter, PagerDuty delivered revenue of $120 million, representing 8% growth." She acknowledged challenges, noting, "These results reflect transitional dynamics in our go-to-market motion and are not at the standard that we expect from ourselves." Tejada emphasized strategic priorities, highlighting efforts to improve sales execution and customer relationships, asserting, "We have a clear path to GAAP profitability." She expressed optimism about future growth, stating, "I'm very confident about our ability to accelerate growth in the back half," underscoring the importance of leveraging AI and enhancing customer engagement.

Guidance

For Q2 of fiscal 2026, PagerDuty expects revenue between $122.5 million and $124.5 million, reflecting a growth rate of 6% to 7%. For the full fiscal year, revenue guidance is set at $493 million to $499 million, indicating a growth rate of 5% to 7%. The company anticipates net income per diluted share to range from $0.95 to $1, with an operating margin of 20% to 21%.

Additional News

PagerDuty announced the renewal of its Strategic Collaboration Agreement (SCA) with Amazon Web Services (AWS) on May 13, 2025, aiming to enhance automation and operational resilience for its clients. Additionally, on April 28, 2025, PagerDuty appointed a new member to its Board of Directors in partnership with Scalar Gauge Fund. In other developments, PagerDuty was recognized as a leader and outperformer in the GigaOm Radar for IT Incident Response Platforms for the third consecutive year on April 8, 2025. These initiatives and recognitions underscore the company's ongoing efforts to strengthen its market position and leadership in digital operations management.