PagerDuty 2026 Q2 Earnings Remarkable Turnaround as Net Income Surges 184%

PagerDuty (NYSE: PD) reported its Q2 2026 earnings on September 3, 2025, showcasing a strong rebound to profitability and delivering better-than-expected results. The company not only returned to the black with a net profit but also guided for continued growth and margin expansion. Investors, however, have seen mixed price action in the short term.

Revenue
PagerDuty’s total revenue for Q2 2026 rose to $123.41 million, reflecting a 6.4% increase compared to $115.94 million in the same period in 2025. The company’s ability to grow revenue amid a challenging macroeconomic environment signals resilience in its core SaaS offerings and continued demand for its incident response platform.

Earnings/Net Income
PagerDuty returned to profitability with earnings per share (EPS) of $0.11 in Q2 2026, compared to a loss of $0.14 per share in Q2 2025—a 178.6% positive change. On an absolute basis, the company’s net income surged to $9.41 million in the quarter, a 184.2% turnaround from a net loss of $11.18 million in the prior-year period. This marked a significant operational improvement and demonstrated the company’s progress in cost control and margin optimization. The robust earnings performance exceeded expectations and highlighted the effectiveness of strategic initiatives.

Price Action
Following the earnings report, PagerDuty’s stock has experienced mixed performance in the short term. The stock edged down 2.07% during the latest trading day, dropped 3.65% during the most recent full trading week, and gained 0.91% month-to-date. The post-earnings reaction remains cautious, suggesting investor skepticism about near-term execution, despite strong financial results.

Post-Earnings Price Action Review
CEO Jennifer Tejada outlined key performance highlights from Q2 2026, including $123 million in revenue (6% year-over-year growth), GAAP profitability, and a 25% non-GAAP operating margin. She noted a 5% year-over-year increase in annual recurring revenue (ARR) to $499 million. Tejada acknowledged challenges such as elevated churn and seat optimization efforts, but emphasized strategic shifts toward usage-based pricing, cross-selling AI capabilities, and enhancing enterprise go-to-market execution—particularly in international markets. She also highlighted progress in AI-native customer adoption, platform innovation, and leadership changes, including the appointment of Todd McNab as Chief Revenue Officer. Tejada expressed confidence in the company’s long-term outlook, calling it "compelling."

Guidance
Looking ahead, PagerDuty provided optimistic guidance for Q3 and the full year of 2026. The company expects Q3 revenue to range between $124 million and $126 million, reflecting 4% to 6% year-over-year growth. Net income per diluted share is projected to be between $0.24 and $0.25, with a 21% non-GAAP operating margin. For the full fiscal year 2026, PagerDuty anticipates revenue between $493 million and $497 million, representing 5% to 6% growth. Net income per diluted share is expected to fall between $1.00 and $1.04, with an operating margin of 21% to 22%. CFO Howard Wilson also highlighted improved trailing 12-month billings growth expectations and announced an expanded $200 million share repurchase program.

Additional News
In the broader financial and business landscape, Nigeria’s non-oil revenue has surged by 40% to N20.6 trillion, according to the Presidency. President Bola Tinubu has emphasized his administration’s efforts to restore Nigeria’s global standing through economic reforms, including mandatory health insurance across government agencies. Meanwhile, Dangote Industries Limited denied ownership of a truck involved in a fatal accident in Enugu, a development that has sparked public and media interest. Additionally, Nigeria’s National Assembly is preparing for a new round of debates on healthcare funding and infrastructure, as economic reforms continue to take shape.