PagerDuty 2026 Q3 Earnings Profitability Surge of 2734.3%

PagerDuty (PD) reported fiscal 2026 Q3 earnings on Nov 26, 2025, delivering a net income of $161.40 million—2734.3% higher than the $-6.13 million loss in 2025 Q3. Revenue rose 4.7% to $124.55 million, aligning with expectations. However, Q4 guidance was trimmed to $122–124 million, reflecting seat-based license compression and macroeconomic pressures.

Revenue

The total revenue of PagerDuty increased by 4.7% to $124.55 million in 2026 Q3, up from $118.95 million in 2025 Q3.

Earnings/Net Income

PagerDuty returned to profitability with EPS of $1.72 in 2026 Q3, reversing from a loss of $0.07 per share in 2025 Q3 (2557.1% positive change). The company achieved a remarkable turnaround with net income of $161.40 million, representing a 2734.3% positive swing from the net loss of $-6.13 million in 2025 Q3. This marks the second consecutive quarter of GAAP profitability. The EPS performance reflects a significant improvement in financial discipline.

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%. The strategy had a maximum drawdown of 0.00%, a Sharpe ratio of -0.13, and a volatility of 33.52%.

CEO Commentary

Jennifer Tejada, Chair of the Board & CEO, highlighted Q3 2026 revenue of $125 million (5% YoY growth) and non-GAAP operating margin of 29% (up 750 bps YoY), alongside GAAP profitability for the second quarter. She noted challenges from enterprise seat license compression due to budget caution but emphasized progress in AI operations, usage-based pricing, and go-to-market transformation. Strategic priorities include expanding margins via efficiency, extending product leadership in AI/agent orchestration, and scaling adoption programs to improve retention. Tejada expressed cautious optimism, stating, “We’re executing from a position of strength… confident in accelerating profitable growth,” while acknowledging macroeconomic pressures.

Guidance

Howard Wilson, CFO, provided Q4 2026 revenue guidance of $122–124 million (0–2% YoY growth) and full-year 2026 revenue of $490–492 million (5% YoY growth). Full-year operating margin guidance was raised to 24%, with EPS of $1.11–1.12. Wilson cited seat-based contraction and budget caution as near-term headwinds but noted margin expansion and cash flow resilience. He stated, “We expect gross margin to return to target ranges… and continue returning capital to shareholders.”

Additional News

1. C-Level Transition: Howard Wilson, CFO, announced his retirement in 2027 after nine years, during which PagerDuty grew ARR to nearly $500 million and achieved GAAP profitability.

2. Leadership Expansion: Todd McNabb, newly appointed Chief Revenue Officer, joined to accelerate go-to-market transformation. Early results showed collaboration with nearly 40 customers in his first 30 days.

3. Strategic Pricing Shift: The company transitioned to usage-based pricing models, reducing friction for enterprise clients. A Fortune 25 automotive leader and a major Australian bank expanded multiyear partnerships, reflecting confidence in PagerDuty’s AI operations platform.

Image: PagerDuty’s AI Operations Platform – Visualizing the shift from seat-based to usage-based pricing and AI agent integration.

Article Polishing

• Enhanced transitions between sections for smoother readability.

• Adjusted punctuation and spacing for consistency.

• Ensured all numerical data and factual claims from the original article were preserved.

• Maintained the original structure and bold headings.