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- **Revenue resilience**: $125M Q3 revenue (+5% YoY) with GAAP net income of $160M, marking second consecutive quarter of GAAP profitability.
- **Margin expansion**: Operating margin 29% (vs. 21% YoY), with long-term target of 30%.
- **Retention headwinds**: DBNR at 100% due to enterprise seat compression, offset by multiyear deals and usage-based pricing wins (+50% YoY in AIOps). 
- **Strategic shift**: Transitioning from seat-based to usage-based licensing, with AIOps now >$1M ARR and 2.4M shares repurchased under buyback plan.

**【CEO Summary Section】**
- Q3 revenue of $125 million, up 5% YoY, with GAAP net income of $160 million (including a one-time tax benefit). Non-GAAP operating margin expanded to 29%, up 800 basis points YoY.
- Annual Recurring Revenue (ARR) reached $497 million, growing 3% YoY, driven by 5% expansion in high-value customers (> $100k ARR). 
- Key challenges: Seat license compression in large enterprises due to budget caution, offset by multiyear agreements and usage-based pricing wins (e.g., +50% YoY growth in AIOps product). 
- Strategic focus: 1) Expand operating margins toward 30% via cost efficiency; 2) Build AI operations leadership with agentic incident management suite; 3) Shift from seat-based to usage-based pricing models.

**【CFO Financial Commentary】**
- Q3 gross margin 87%, above target range of 84-86%, driven by operational efficiency. Operating income $36 million (29% of revenue), up from $25 million (21% of revenue) YoY.
- Free cash flow $21 million (17% of revenue), with $548 million in cash on hand. Shares repurchased: 2.4 million under $200 million buyback plan.
- Q4 guidance: Revenue $122-124 million (0-2% YoY), full year ARR $490-492 million (5% YoY). Operating margin target 24% for FY26, up from prior 21-22% range.
- Long-term outlook: GAAP profitability for full year FY27, with focus on margin expansion and cash flow generation.

**【Q&A Key Highlights】**
- **Retention Challenges**: Dollar-based net retention (DBNR) at 100% (down from 102% Q2), driven by larger-than-expected seat reductions in reorganizing enterprises. Absolute churn improved, but dollar impact worsened. 
- **Usage-Based Pricing**: Early wins in gaming, automotive, and banking sectors, with flexible licensing reducing friction for expansion. AIOps product now >$1 million ARR. 
- **Go-to-Market Shift**: New CRO Todd McNabb driving land/expand motion, with 40+ customer engagements in first 30 days. Focus on multiyear agreements and professional services to accelerate value realization. 
- **Product Innovation**: Industry-first agentic incident management suite launched, with agents leveraging 700+ integrations and MCP protocol for cross-platform orchestration. Integration with Spotify's Backstage developer portal positions as proactive issue prevention leader.

PagerDuty, Inc. (PD) Q3 2026 Earnings Call Transcript

- **First GAAP Profitable Quarter**: $123M revenue, 25% operating margin, and $31M GAAP net income.
- **ARR Growth & Expansion**: $499M ARR (+5% YoY), 102% DBNR, and 208 new customers in H1.
- **AI-Driven Innovation**: Launch of four AI agents, 60%+ growth in AI Ops, and 2% ARR from AI-native companies.
- **Financial Strength**: $568M cash, $30M free cash flow, and expanded $200M share buyback program.
- **Pipeline & Strategy**: 60%+ tenured reps, new CRO to accelerate enterprise sales, and shift to usage-based pricing.

**【CEO Summary Section】**
- Q2 revenue of $123 million, marking the first GAAP profitable quarter in company history.
- Annual Recurring Revenue (ARR) reached $499 million, up 5% year-over-year, with 102% Dollar-Based Net Retention (DBNR).
- New customer additions doubled compared to FY25, with 208 net new customers in the first half.
- Shift to usage-based pricing models, with AI Ops growing over 60% and new AI agents (Shift, Scribe, Insights, SRE) launching this quarter.
- Strategic partnerships with Amazon Q and Microsoft Azure, enhancing ecosystem integration.
- Traction in AI-native companies, contributing 2% of ARR and growing rapidly.

**【CFO Financial Commentary】**
- GAAP net income of $31 million, with non-GAAP operating margin of 25%.
- Gross margin of 86%, cash flow from operations of $34 million, and free cash flow of $30 million.
- Q3 guidance: Revenue $124-126 million (4-6% growth), EPS $0.24-0.25.
- FY26 guidance: Revenue $493-497 million (5-6% growth), EPS $1-1.4.
- Expansion of share repurchase program to $200 million.

**【Q&A Highlights】**
- Transition to usage-based pricing: 60% of new products use this model, with positive customer feedback on value alignment.
- New CRO Todd McNabb to accelerate enterprise sales transformation, focusing on North America and international markets.
- ARR quality: 75% from enterprises, 65% from multi-product customers, 70% from incident management.
- Seat optimization impact: DBNR decline due to downgrades, but platform usage growing 25%+ year-over-year.
- Pipeline improvement: 60% of reps with >1 year tenure, stronger account coverage in international regions.
- FY27 outlook: GAAP profitability, margin expansion, and capital return through share buybacks.

PagerDuty, Inc. (PD) Q2 2026 Earnings Call Transcript

- **Revenue Resilience**: Q1 2026 revenue up 8% YoY to $120 million, with ARR at $496 million (7% YoY). Non-GAAP operating margin improved to 20%.
- **AI-Driven Expansion**: Generative AI solutions like PagerDuty Advance gained traction, with 25% of enterprise customers expanding use cases. New pricing flexibility accelerates adoption.
- **Sales Transformation**: Over 60% of enterprise reps will be in role >1 year by Q2, signaling maturing sales execution and potential H2 improvement.
- **Financial Discipline**: Strong cash flow ($29M free cash flow) and $597M cash balance support $150M share buyback program. Operating margin target of 30% remains long-term focus.
- **Key Wins**: 7-figure deal with global financial market infrastructure company and 6-figure commitment from leading AI research firm highlight platform resilience in mission-critical environments.


**【CEO Summary Section】**
- Q1 2026 revenue reached $120 million, up 8% YoY, with ARR growing to $496 million (7% YoY). Non-GAAP operating margin improved to 20%, exceeding targets by 500 basis points.
- Dollar-based net retention (DBNR) was 104%, impacted by enterprise downgrades and commercial churn. New commercial digital acquisition strategy drove net new customers to 127, the highest in eight quarters.
- Strategic shifts include transitioning to value-centric enterprise sales, expanding AI capabilities (e.g., PagerDuty Advance), and deepening customer engagement through post-sale frameworks. Over 60% of enterprise reps will be in their role for at least a year by Q2, signaling maturing sales execution.
- Key wins include a 7-figure multiyear deal with a global financial market infrastructure company and a 6-figure commitment from a leading AI research firm, showcasing platform resilience in mission-critical environments.

**【CFO Financial Commentary】**
- Q1 GAAP net income was $420 million, with non-GAAP EPS of $1.08, exceeding expectations. Gross margin was 86% (high end of 84-86% target). Operating income was $24 million (20% of revenue), up from $15 million (14% of revenue) in Q1 2025.
- Free cash flow was $29 million (24% of revenue). Cash balance remained strong at $597 million, supporting a $150 million share repurchase program.
- Q2 guidance: Revenue $122.5-124.5 million (6-7% YoY), operating margin 17%. Full-year 2026 revenue expected $493-499 million (5-7% YoY), with operating margin 20-21%.

**【Q&A Key Highlights】**
- **Enterprise Execution**: CEO attributes Q1 challenges to transitional execution gaps but notes 848 customers over $100k ARR (5% YoY growth). New sales leadership and mature reps expected to drive H2 improvement.
- **AI Adoption**: Generative AI solutions (e.g., AI Scribe) saw strong customer interest, with 25% of enterprise customers expanding use cases. Pricing flexibility and product-led growth are reducing friction.
- **Financial Prudence**: CFO emphasizes prudent guidance reflecting organizational transitions. Operating margin target of 30% remains long-term focus, with share buybacks and GAAP profitability on track for FY2027.
- **SMB Recovery**: Commercial segment shows demand recovery, driven by native AI companies and product-led growth. SMB ARR growth aligns with enterprise momentum.


PagerDuty, Inc. (PD) Q1 2026 Earnings Call Transcript

- **Non-GAAP Profitability & Growth**: 9% ARR expansion, 18% operating margin, and 23% free cash flow margin highlight operational excellence.
- **Enterprise Strength**: 72 customers exceed $1M ARR, 849 >$100K customers, with 12% YoY growth in >$100K ARR (71% of total).
- **AI Innovation Momentum**: Launch of AI agents for SRE, operations, and scheduling; 40%+ incremental ARR from AIOps/Automation in Q4.
- **FY'26 Outlook**: 7-8% revenue growth, 19-20% operating margin, and $150M share buyback signal confidence.
- **Customer Success**: 28% incident duration reduction and 3x ARR investment growth in two years validate platform value.

**【CEO Summary Section】**
- Delivered third consecutive year of non-GAAP profitability with 9% revenue and ARR growth, expanding non-GAAP operating margin to 18% and free cash flow margin to 23%.
- Enterprise traction strong: 72 customers exceed $1M ARR, 849 customers invest >$100K annually, with ARR from >$100K customers growing 12% YoY (71% of total ARR).
- Multi-product adoption accelerates: 65% of ARR from multi-product customers (up from 62% last year).
- Launched AI agents for SRE, operations analysis, and scheduling optimization, embedding AI across all paid tiers.
- Customer success stories include a financial institution reducing incident duration by 28% and a semiconductor supplier tripling ARR investment in two years.
- FY'26 priorities: build pipeline, accelerate enterprise adoption, and demonstrate platform innovation value.

**【CFO Financial Commentary】**
- Q4 revenue: $121M (+9% YoY), ARR: $494M (+9% YoY), non-GAAP operating margin: 18%.
- Introduced $150M share repurchase program, completing $100M program in Q4.
- FY'26 guidance: revenue $500M-$507M (+7-8%), EPS $0.90-$0.95, operating margin 19-20%.
- Long-term operating margin target raised to 20-30% (from 20%).
- Q1'26 outlook: revenue $118M-$120M (+6-8%), EPS $0.18-$0.19.

**【Q&A Key Highlights】**
- **Market & Sales Execution**: Adapted to enterprise top-down selling, hiring 150+ reps with 64% in Q4. Early success in multi-year agreements (e.g., 3-year financial institution deal). 
- **Competitive Position**: Differentiated by platform depth, multi-year contracts (69% of RPO in next 12 months), and 72% enterprise NRR vs. 62% SMB.
- **AI & Innovation**: AI agents in early adoption phase, with 40%+ incremental ARR from AIOps/Automation in two consecutive quarters.
- **SMB Recovery**: Rebalanced commercial strategy with digital-first experience, expecting modest SMB growth in FY'26.
- **Macro Impact**: No immediate tariff impact, focusing on high ROI platforms with 400%+ customer ROI (e.g., financial institution case study).

PagerDuty (PD)-13 Mar 25-2025 Q4 Earnings call transcript

PagerDuty (PD)-26 Nov 24-2025 Q3 Earnings call transcript

PagerDuty (PD)-3 Sep 24-2025 Q2 Earnings call transcript

Pagerduty (PD)-30 May 24-2025 Q1 Earnings call transcript

Pagerduty (PD)-14 Mar 24-2024 Q4 Earnings call transcript

Pagerduty (PD)-30 Nov 23-2024 Q3 Earnings call transcript

Pagerduty (PD)-31 Aug 23-2024 Q2 Earnings call transcript

Pagerduty (PD)-1 Jun 23-2024 Q1 Earnings call transcript

- **Revenue and Profit Growth**: FY2023 revenue up 32% to $371 million, with non-GAAP profitability achieved one year early. Q4 revenue $101 million (29% YoY), operating margin 6%.
- **Innovative Products**: Launch of AI-driven Incident Workflows and Status Pages, with 752 customers spending over $100,000 ARR (27% YoY growth).
- **FY2024 Outlook**: 20-22% revenue growth, 8-9% operating margin, driven by platform expansion and automation.
- **Strategic Focus**: Leveraging AI/automation for efficiency, navigating macro challenges with disciplined cost control and customer retention.

**【CEO Summary Section】**
- **Revenue Growth and Profitability**: Achieved 32% year-over-year revenue growth in FY2023, surpassing $400 million in annual recurring revenue (ARR). Non-GAAP profitability was achieved one year ahead of plan, with a 1% operating margin. Q4 revenue was $101 million, up 29% YoY.
- **Product Innovation**: Launched Incident Workflows (AI-driven automation) and Status Pages, which integrate with Event Orchestration for real-time updates. These products help customers reduce costs and improve operational efficiency.
- **Customer Retention**: Dollar-based net retention rate of 120% for nine consecutive quarters. Customers spending over $100,000 ARR grew 27% YoY to 752.
- **Challenges**: Elongated sales cycles and elevated churn in SMBs, but adapted by improving cost structure and platform differentiation.

**【CFO Financial Commentary】**
- **Q4 Financials**: Revenue $101 million (29% YoY), non-GAAP operating margin 6%, free cash flow $16 million. FY2023 revenue $371 million (32% YoY), non-GAAP operating margin 1%, free cash flow $9 million.
- **FY2024 Guidance**: Revenue $446-452 million (20-22% growth), non-GAAP net income $0.45-0.50 per share, operating margin 8-9%. Q1 guidance: $102-104 million revenue, 6-7% operating margin.
- **Key Metrics**: Gross margin 85-86%, deferred revenue $209 million (23% YoY), billings $130 million (23% YoY).

**【Q&A Highlights】**
- **Generative AI and Automation**: Investing in AI for workflow automation and AIOps. Generative AI's role in diagnostics and root cause analysis is under exploration.
- **International Markets**: 24% of revenue from international, with Japan showing early success. Europe faces elongated sales cycles but high customer engagement.
- **Partnerships**: AWS and ServiceNow integrations drive platform adoption. Japan partnership with local firms targets financial services.
- **Macroeconomic Impact**: Longer sales cycles, smaller deal sizes, but strong retention and platform monetization offset challenges.
- **Free Cash Flow**: Expects FY2024 free cash flow margin to be 2-3 points higher than operating margin.

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