PagerDuty (NYSE:PD) Posts Earnings Results, Meets Expectations

PagerDuty (NYSE:PD) issued its quarterly earnings results on Thursday. The company reported $0.32 earnings per share for the quarter, meeting analysts’ consensus estimates of $0.32, FiscalAI reports. PagerDuty had a return on equity of 17.97% and a net margin of 37.50%.The business had revenue of $124.44 million during the quarter, compared to the consensus estimate of $124.22 million. During the same period in the previous year, the business earned $0.30 EPS. The business’s quarterly revenue was up .8% on a year-over-year basis. PagerDuty updated its FY 2027 guidance to 1.330-1.370 EPS and its Q3 2027 guidance to 0.340-0.360 EPS.

Here are the key takeaways from PagerDuty’s conference call:

• PagerDuty’s ARR surpassed $500 million for the first time, reaching $501 million, while dollar-based net retention improved sequentially to 98% and customers generating more than $100,000 annually increased to 884.
• The company reported growing adoption of its usage-based Operations Cloud, which grew double digits overall in Q2, and plans to launch it as the AI-first PD Reliability Platform later this quarter with autonomous SRE capabilities available to all customers.
• PagerDuty exceeded profitability expectations, delivering a 23.7% non-GAAP operating margin and $33 million of free cash flow. Following restructuring and cost reductions, FY2027 operating-margin guidance increased to 25%-26%, with free-cash-flow margin now expected to remain in line with FY2026.
• Revenue was $124.4 million, up just 1% year over year, and full-year FY2027 revenue guidance implies approximately flat growth at the midpoint, highlighting continued top-line pressure despite improving retention and new customer activity.
• The company is reducing its workforce by approximately 15%, primarily in non-customer-facing roles, with expected restructuring charges of $5.5 million-$7.5 million and management acknowledging that the business still has work to do before stabilization is complete.

PagerDuty Price Performance

NYSE PD opened at $13.80 on Friday. The company has a 50-day moving average price of $10.68 and a two-hundred day moving average price of $8.44. PagerDuty has a 52 week low of $5.70 and a 52 week high of $17.29. The stock has a market cap of $1.06 billion, a price-to-earnings ratio of 6.90, a price-to-earnings-growth ratio of 3.24 and a beta of 0.93. The company has a current ratio of 1.95, a quick ratio of 1.95 and a debt-to-equity ratio of 1.83.

More PagerDuty News

Here are the key news stories impacting PagerDuty this week:

• Positive Sentiment: Q2 results exceeded expectations. PagerDuty reported adjusted earnings of $0.32 per share versus the $0.31 consensus estimate and revenue of $124.44 million, ahead of expectations for $123.27 million. Revenue increased 0.8% year over year. PagerDuty Q2 Earnings Results
• Positive Sentiment: Management raised its earnings outlook. Fiscal 2027 EPS guidance of $1.33 to $1.37 is well above the $1.17 analyst consensus, while third-quarter EPS guidance of $0.34 to $0.36 also exceeds expectations. Full-year revenue guidance of $491.5 million to $496.5 million is broadly in line with estimates. PagerDuty Guidance Update
• Positive Sentiment: Cost reductions are supporting margins. PagerDuty plans to cut approximately 15% of its workforce and forecast third-quarter operating margins of 26.5% to 27.5%. Investors appear to be viewing the restructuring as a way to accelerate profitable growth. The company also highlighted more than $500 million in annual recurring revenue and $33 million in quarterly free cash flow. PagerDuty Margin Forecast and Restructuring
• Positive Sentiment: Canaccord Genuity upgraded its valuation view. The firm raised its price target from $10 to $15 and maintained a Buy rating, providing additional support for the stock’s advance. Canaccord Raises PagerDuty Price Target
• Neutral Sentiment: Analyst opinion remains mixed. Monness analyst Brian White reiterated a Hold rating, citing sluggish demand and mixed fundamentals. This suggests investors may question whether the improved profitability can be sustained if growth remains limited. PagerDuty Hold Rating

PagerDuty declared that its board has approved a stock repurchase program on Thursday, May 28th that permits the company to repurchase $100.00 million in shares. This repurchase authorization permits the company to reacquire up to 16.4% of its stock through open market purchases. Stock repurchase programs are often an indication that the company’s management believes its shares are undervalued.

Wall Street Analyst Weigh In

A number of research analysts have recently issued reports on PD shares. Canaccord Genuity Group raised their price target on shares of PagerDuty from $10.00 to $15.00 and gave the stock a “buy” rating in a research report on Friday. TD Cowen reaffirmed a “buy” rating on shares of PagerDuty in a research report on Wednesday. Wall Street Zen cut shares of PagerDuty from a “buy” rating to a “hold” rating in a report on Saturday, July 25th. Weiss Ratings upgraded PagerDuty from a “sell (d+)” rating to a “hold (c-)” rating in a research note on Friday, August 21st. Finally, UBS Group set a $13.50 target price on PagerDuty in a report on Wednesday. Three equities research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and two have issued a Sell rating to the company. Based on data from MarketBeat, the company presently has a consensus rating of “Hold” and an average price target of $12.94.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently modified their holdings of the business. Kestra Advisory Services LLC acquired a new stake in shares of PagerDuty in the fourth quarter valued at $68,000. Los Angeles Capital Management LLC bought a new stake in PagerDuty during the fourth quarter worth approximately $114,000. Inceptionr LLC acquired a new position in PagerDuty in the fourth quarter worth approximately $132,000. State of Tennessee Department of Treasury acquired a new stake in shares of PagerDuty during the 2nd quarter valued at $160,000. Finally, Numerai GP LLC bought a new stake in shares of PagerDuty during the 4th quarter worth $161,000. Institutional investors own 97.26% of the company’s stock.

PagerDuty Company Profile

PagerDuty, Inc engages in the operation of a digital operations management platform in the United States and internationally. The company’s digital operations management platform collects data and digital signals from virtually any software-enabled system or device and leverage machine learning to correlate, process, and predict opportunities and issues. Its platform includes PagerDuty Incident Management that provides a real-time view across the status of a digital service while incorporating noise reduction to remove false positives; AIOps that applies machine learning to correlate and automate the identification of incidents from billions of events; Process Automation offers centralized design time and run time environment for orchestrating automated workflows that span across departments, technologies, and networks; Customer Service Operations, which is offered to orchestrate, automate, and scale responses to customer impacting issues.