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Jul 31
PagerDuty Q2 2026 Earnings Report
PagerDuty posted a profitable Q2 FY2026, with growing revenue, strong cash flow, and solid expansion in enterprise ARR.
Key Takeaways
PagerDuty achieved GAAP profitability in Q2 FY2026, with revenue of $123.4 million and strong free cash flow. The company continues to grow its ARR base and expand its presence in the enterprise market, supported by its AI-driven platform.
Achieved GAAP net income of $9.8M for the quarter.
Revenue rose to $123.4M, a 6.4% increase YoY.
Non-GAAP EPS reached $0.30, reflecting solid operational leverage.
Free cash flow came in at $30.2M with a margin of 24.5%.
PagerDuty
PagerDuty
Forward Guidance
PagerDuty expects Q3 FY2026 revenue of $124M–$126M and raised its full-year non-GAAP EPS outlook, showing confidence in profitability and revenue growth despite macro pressures.
Positive Outlook
- Q3 revenue guidance of $124M–$126M, up 4%–6% YoY.
- FY26 revenue guidance reaffirmed at $493M–$497M.
- FY26 non-GAAP EPS guidance raised to $1.00–$1.04.
- 94 million diluted shares projected for FY26 EPS calculation.
- Company expects continued strength in AI-powered platform adoption.
Challenges Ahead
- Dollar-based net retention rate declined from 106% to 102%.
- Deferred revenue declined sequentially to $227M.
- Q3 revenue growth expected to be moderate (4%–6%).
- Operating cash flow margin slightly down YoY.
- Competition and macroeconomic factors may impact growth trajectory.