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PagerDuty Inc (PD)
NYSE:PD
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PagerDuty
(NYSE:PD)
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Rating:63Neutral
Price Target:
$12.50
▲(1.79% Upside)
PagerDuty's overall score is driven by strong financial performance in terms of revenue growth and cash flow improvements. However, technical indicators suggest bearish momentum, and operational profitability remains a concern. The earnings call provided positive insights into margin improvements and customer growth, but challenges with retention and seat license compression persist.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion.
Cash Flow Management
Improving cash flow management enhances financial flexibility, allowing for strategic investments and resilience during economic fluctuations.
Customer Acquisition
Strong customer acquisition reflects successful market penetration and product appeal, which can drive sustained revenue growth.
Negative Factors
High Leverage
Significant leverage can constrain financial flexibility and increase risk, potentially impacting long-term financial stability.
Seat License Compression
Ongoing seat license compression may limit revenue growth potential, especially in large enterprises, affecting future earnings.
ARR Growth Pressure
Slower ARR growth suggests challenges in expanding existing customer spend, which could hinder long-term revenue scalability.
PagerDuty (PD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.13B
Dividend YieldN/A
Average Volume (3M)2.50M
Price to Earnings (P/E)7.7
Beta (1Y)1.35
Revenue Growth7.01%
EPS GrowthN/A
CountryUS
Employees1,242
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.33
Shares Outstanding91,776,800
10 Day Avg. Volume4,301,201
30 Day Avg. Volume2,495,292
Financial Highlights & Ratios
PEG Ratio1.18
Price to Book (P/B)13.12
Price to Sales (P/S)3.64
P/FCF Ratio15.72
Enterprise Value/Market Cap1.24
Enterprise Value/Revenue2.86
Enterprise Value/Gross Profit3.39
Enterprise Value/Ebitda571.13
Forecast
1Y Price Target
$16.50Price Target Upside34.36% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
PagerDuty Business Overview & Revenue Model
Company DescriptionPagerDuty, Inc. operates a digital operations management platform in the United States, Japan, and internationally. Its digital operations management platform collects data digital signals from virtually any software-enabled system or device, and leverage powerful machine learning to correlate, process, and predict opportunities and issues. It serves various industries, including software and technology, telecommunications, retail, travel and hospitality, media and entertainment, and financial services. PagerDuty, Inc. was founded in 2009 and is headquartered in San Francisco, California.
How the Company Makes MoneyPagerDuty generates revenue through a subscription-based model, offering various tiers of service plans tailored to different organizational needs. The key revenue streams include monthly or annual subscription fees for access to its platform, which provides features like incident response, on-call scheduling, and analytics. Additionally, PagerDuty monetizes through upselling premium features and integrations with third-party tools. Significant partnerships with major cloud service providers and technology platforms also enhance its market reach and contribute to its earnings by providing bundled services that attract new customers.
PagerDuty Earnings Call Summary
Earnings Call Date:Nov 25, 2025
(Q3-2026)
| % Change Since: |
Next Earnings Date:Mar 18, 2026
Earnings Call Sentiment Neutral
PagerDuty demonstrated strong financial discipline and growth in operating margins, along with significant new customer acquisition and positive feedback on product innovations. However, the company faced challenges with seat license compression, lower retention rates, and pressure on ARR growth, leading to a reduction in revenue guidance. While there is optimism regarding the transition to usage-based pricing and multiyear agreements, current headwinds present notable challenges.Q3-2026 Updates
Positive Updates
Revenue and Operating Margin Growth
PagerDuty delivered revenue of $125 million, up 5% year over year. The non-GAAP operating margin of 29% exceeded guidance by 750 basis points over last year.
GAAP Profitability Achieved
GAAP profitability was achieved for the second consecutive quarter, indicating disciplined execution and a durable profitable growth model.
Strong Cash Position
Ended the quarter with $548 million in cash, cash equivalents, and investments.
Product and Market Innovation
Accelerated product innovation and operational efficiency in the digital and AI operation space, extending leadership in incident management.
New Customer Acquisition
Added 284 net new customers year to date, nearly four times the total in FY25.
High-Value Customer Growth
Customers spending over $100,000 per year increased by 5% year over year to 867 customers.
Positive Customer Feedback on New Solutions
Early traction and positive customer feedback on PagerDuty's agents demonstrate the need for AgenTex solutions to scale operations effectively.
Successful Multiyear Agreements
Engaged in multiyear agreements with leading companies, illustrating the need for best-in-class and AI operations.
Negative Updates
Seat License Compression
Seat license compression continues to be a significant challenge, particularly in large enterprises where budget caution and right-sizing have impacted incident management business.
Lower Dollar-Based Net Retention
DBNR decreased to 100% compared to 102% in Q2, negatively impacted by lower gross retention.
Pressure on ARR Growth
Annual recurring revenue grew 3% year over year to $497 million, with incremental ARR being lower than expected due to pressure on seat licenses and smaller expansion deal sizes.
Q4 Revenue Guidance Lowered
Revenue guidance for Q4 fiscal 2026 was lowered to a range of $122 to $124 million, representing a growth of zero to 2%.
Challenges with Customer Retention
Although the number of customers churning and downgrading is trending downwards, the dollar value of contraction driven by seat-based reductions and customer budget caution has been larger than forecast.
Company Guidance
During the third quarter of fiscal year 2026, PagerDuty, Inc. reported a revenue of $125 million, marking a 5% increase year-over-year. The company achieved a non-GAAP operating margin of 29%, which exceeded guidance by 750 basis points compared to the previous year. Annual recurring revenue (ARR) reached $497 million, reflecting a 3% growth year-over-year. Despite facing challenges with seat license reductions, PagerDuty saw a double-digit year-over-year growth in new customer acquisitions, with 284 net new customers added year-to-date. The company also reported GAAP net income of $160 million, including a one-time income tax benefit of $154 million. International revenue increased by 7%, making up 29% of the total revenue. PagerDuty expects to maintain GAAP profitability for the full year next fiscal year and is focused on expanding operating and free cash flow margins. The company's guidance for the fourth quarter anticipates revenue in the range of $122 to $124 million, with a net income per diluted share between 24 to 25 cents, implying an operating margin of 21%. For the full fiscal year 2026, revenue is projected to be between $494 to $497 million, with an operating margin of 24%.PagerDuty Financial Statement Overview
Summary
PagerDuty shows strong revenue growth and high gross profit margins, but struggles with operational profitability and high leverage. Cash generation is improving, yet alignment with earnings needs enhancement.Income Statement
PagerDuty has shown strong revenue growth with a TTM growth rate of 15.8%, indicating robust demand for its services. The gross profit margin is high at 84.36%, reflecting efficient cost management. However, the company has struggled with profitability, as evidenced by a negative EBIT margin, though the net profit margin has turned positive at 31.12% due to non-operational factors. Overall, the income statement reflects strong revenue growth and gross profitability, but operational profitability remains a challenge.75
Positive
Balance Sheet
The balance sheet shows a high debt-to-equity ratio of 1.27 in the TTM period, indicating significant leverage, which poses financial risk. The return on equity is negative, suggesting that the company is not generating sufficient returns on shareholders' investments. However, the equity ratio is reasonable, indicating a balanced asset structure. The balance sheet reflects a need for improved financial stability and profitability.60
Neutral
Cash Flow
PagerDuty's cash flow statement shows positive trends, with a free cash flow growth rate of 381.3% in the TTM period, indicating improved cash generation capabilities. The operating cash flow to net income ratio is 0.43, suggesting that cash flows are not fully aligned with reported earnings. The free cash flow to net income ratio is strong at 0.95, highlighting efficient cash conversion. Overall, the cash flow statement indicates improving cash generation, though alignment with earnings could be enhanced.70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 467.50M | 430.70M | 370.79M | 281.40M | 213.56M |
| Gross Profit | 387.83M | 352.87M | 300.36M | 233.03M | 182.87M |
| EBITDA | -11.89M | -52.80M | -107.20M | -93.36M | -57.57M |
| Net Income | -42.73M | -81.76M | -129.22M | -107.45M | -68.90M |
Balance Sheet | |||||
| Total Assets | 927.27M | 925.31M | 817.87M | 806.45M | 795.44M |
| Cash, Cash Equivalents and Short-Term Investments | 570.83M | 571.19M | 476.97M | 543.36M | 560.28M |
| Total Debt | 463.65M | 461.02M | 301.52M | 307.62M | 249.33M |
| Total Liabilities | 779.22M | 746.41M | 575.79M | 539.47M | 428.72M |
| Stockholders Equity | 129.83M | 171.60M | 240.98M | 266.98M | 366.73M |
Cash Flow | |||||
| Free Cash Flow | 108.41M | 64.43M | 8.51M | -12.83M | 5.25M |
| Operating Cash Flow | 117.89M | 71.97M | 16.98M | -6.02M | 10.10M |
| Investing Cash Flow | -19.97M | -30.52M | -86.17M | 17.38M | -49.32M |
| Financing Cash Flow | -116.14M | 51.60M | -6.41M | -736.00K | 254.37M |
PagerDuty Technical Analysis
Negative
12.28
Price Trends
15.23
Negative
15.60
Negative
15.89
Negative
Market Momentum
-1.01
Positive
32.36
Neutral
23.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PD, the sentiment is Negative. The current price of 12.28 is below the 20-day moving average (MA) of 14.12, below the 50-day MA of 15.23, and below the 200-day MA of 15.89, indicating a bearish trend. The MACD of -1.01 indicates Positive momentum. The RSI at 32.36 is Neutral, neither overbought nor oversold. The STOCH value of 23.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PD.
PagerDuty Risk Analysis
PagerDuty disclosed 67 risk factors in its most recent earnings report. PagerDuty reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
PagerDuty Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $1.13B | 8.81 | 20.19% | ― | 5.80% | 12.20% | |
76 Outperform | $1.46B | 26.47 | 34.42% | 2.65% | 18.30% | 22.19% | |
73 Outperform | $1.01B | ― | -1.68% | ― | 19.87% | -136.93% | |
63 Neutral | $1.13B | 7.67 | 70.46% | ― | 7.01% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $634.13M | ― | -26.69% | ― | 13.09% | 32.34% | |
51 Neutral | $408.12M | ― | -25.34% | ― | -7.43% | 61.36% |
* Technology Sector Average
PD
PagerDuty
12.28
-8.47
-40.82%
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3.62
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SEMR
SEMrush Holdings
11.84
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PagerDuty Corporate Events
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
PagerDuty CFO Owen Howard Wilson Announces Retirement
Positive
Nov 25, 2025
On November 22, 2025, PagerDuty announced the upcoming retirement of its Chief Financial Officer, Owen Howard Wilson, pending the appointment of a successor. The company also reported its third-quarter fiscal 2026 financial results, highlighting a 5% year-over-year revenue increase to $125 million and a 3% growth in Annual Recurring Revenue to $497 million. PagerDuty achieved its second consecutive quarter of GAAP profitability, showcasing strong operational performance and strategic advancements in AI and incident management solutions. The company anticipates continued growth and market expansion, supported by a robust balance sheet and free cash flow.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.