PD · PagerDuty, Inc.

PagerDuty's first-quarter fiscal 2027 results modestly exceeded guidance on both revenue and non-GAAP operating margin, reflecting disciplined execution against strategic priorities. Revenue of $121.0 million grew 1.0% year-over-year, slightly above the company's guided range of $119.5-$121.5 million. Notably, the company delivered GAAP operating income of $9.2 million (7.6% margin) compared to an operating loss of $10.3 million in the prior-year period, marking the fourth consecutive quarter of GAAP profitability. Non-GAAP operating income improved to $29.7 million, with non-GAAP operating margin expanding to 24.6% from 20.3% a year ago, driven by lower stock-based compensation and reduced spending across research and development, sales and marketing, and general and administrative functions. However, ARR remained flat year-over-year at $496 million, and the dollar-based net retention rate declined to 97% from 104% in the prior year, signaling headwinds in upsell and expansion revenue. The company's cash generation strengthened, with operating cash flow of $44.3 million and free cash flow of $41.2 million, compared to $30.7 million and $29.0 million respectively in the prior year. The balance sheet remains strong with $444.0 million in cash, cash equivalents, and investments. Management guided Q2 FY2027 revenue in the range of $122.0-$124.0 million and non-GAAP diluted EPS of $0.29-$0.31, implying sequential improvement. Full-year FY2027 revenue guidance was reaffirmed at $488.5-$496.5 million, while non-GAAP diluted EPS guidance was raised to $1.27-$1.32 from $1.23-$1.28. The company announced a $100 million share repurchase program, and $65.5 million in shares were repurchased during the quarter. During the quarter, John DiLullo was appointed CEO, with Jennifer Tejada transitioning to Executive Chair. The company highlighted expanding AI offers and a new usage-based Operations Cloud package, along with several new customer wins and partnerships, as drivers of long-term growth. The results indicate that PagerDuty is stabilizing revenue growth while improving profitability, though low net retention and flat ARR suggest near-term growth challenges remain.