PagerDuty Announces Third Quarter Fiscal 2026 Financial Results
SAN FRANCISCO--( BUSINESS WIRE)--PagerDuty, Inc. (NYSE:PD), a leader in digital operations management, today announced financial results for the third quarter of fiscal 2026, ended October 31, 2025.
“PagerDuty delivered $125 million in revenue and our second consecutive quarter of GAAP profitability, reflecting disciplined execution and continued margin expansion,” said Jennifer Tejada, Chairperson and CEO of PagerDuty. “As enterprises scale AI, operational resilience is mission-critical for the 34,000 paid and free customers that rely on PagerDuty. We are operating from a position of strength—product leadership, a strong balance sheet, and robust free cash flow—while advancing a pricing and go-to-market transition that supports durable growth.”
Third Quarter Fiscal 2026 Financial Highlights
The section titled “Non-GAAP Financial Measures” below contains a description of the non-GAAP financial measures and reconciliations between GAAP and non-GAAP financial information.
Third Quarter and Recent Highlights
Financial Outlook
For the fourth quarter of fiscal 2026, PagerDuty currently expects:
For the full fiscal year 2026, PagerDuty currently expects:
These statements are forward-looking and actual results may differ materially. Please refer to the section titled "Forward-Looking Statements" below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
PagerDuty has not reconciled its expectations as to non-GAAP net income per share attributable to PagerDuty, Inc. common stockholders to GAAP net income (loss) per share attributable to PagerDuty, Inc. common stockholders because certain reconciling items such as stock-based compensation expense, employer taxes related to employee stock transactions, amortization of debt issuance costs, amortization of acquired intangible assets, acquisition-related expenses, restructuring costs, gains or losses on extinguishment of convertible senior notes, shareholder matters, adjustment attributable to redeemable non-controlling interest, and income tax effects and adjustments are out of PagerDuty's control or cannot be reasonably predicted. Accordingly, such reconciliation is not available without unreasonable effort. However, it is important to note that these reconciling items could have a significant effect on PagerDuty's future GAAP results.
Conference Call Information
PagerDuty will host a conference call and live webcast (Zoom meeting ID 965 5364 1956) for analysts and investors at 2:00 p.m. Pacific Time on November 25, 2025. For audio only, the dial-in number 1-312-626-6799 may be used. This news release with the financial results will be accessible from PagerDuty’s website at investor.pagerduty.com prior to the conference call. A live webcast of the conference call will be accessible from the PagerDuty investor relations website at investor.pagerduty.com.
Supplemental Financial and Other Information
Supplemental financial and other information can be accessed through PagerDuty’s investor relations website at investor.pagerduty.com. PagerDuty uses the investor relations section on its website as the means of complying with its disclosure obligations under Regulation FD. Accordingly, we recommend that investors monitor PagerDuty’s investor relations website in addition to following PagerDuty’s press releases, SEC filings, social media, including PagerDuty’s LinkedIn account ( https://www.linkedin.com/company/482819), X (formerly Twitter) account @pagerduty, the X account @jenntejada and Facebook page (facebook.com/pagerduty), and public conference calls and webcasts.
Forward-Looking Statements
This press release and the related webcast contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our future financial and operational performance and outlook, and strategies, objectives, opportunity, expectations and market positioning. Words such as “expect,” “extend,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “accelerate,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall,” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks and other factors detailed in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 17, 2025. Additional information will be made available in our Quarterly Report on Form 10-Q for the quarter ended October 31, 2025 and other filings and reports that we may file from time to time with the SEC. In particular, the following risks and uncertainties, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: our ability to achieve and maintain future profitability; our ability to sustain and manage our growth; our ability to attract new customers and retain and sell additional functionality and services to our existing customers; our dependence on revenue from a single product; our ability to compete effectively in an increasingly competitive market; the impact of seasonality on our business; our ability to adapt and respond effectively to rapidly developing technology; our ability to effectively develop and expand our marketing and sales capacities; our ability to enhance and improve our platform or develop new functionality or use cases; the effect of unfavorable conditions in our industry or the global economy, or reductions in information spending, on our business and results of operations; adverse consequences that could arise as a result of international trade policies, including tariffs, sanctions and trade barriers; the accuracy of our estimates of market opportunity and forecasts of market growth; our assumptions and limitations to which ARR and certain other operational data are subject that may cause such metrics to not provide an accurate indication of actual performance or future results; adverse consequences that could result from any compromise of our information technology systems or those of third parties with whom we work or our data; adverse consequences that could result from any interruptions or delays in performance of our service; and our ability to maintain the compatibility of our platform with third party applications that our customers use in their businesses.
Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release and the related webcast represent our views as of the date of this press release and the related webcast. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release and the related webcast.
About PagerDuty, Inc.
PagerDuty, Inc. (NYSE:PD) is a global leader in digital operations management. The PagerDuty Operations Cloud is an AI-powered platform that empowers business resilience and drives operational efficiency for enterprises. With generative AI and agentic AI capabilities tightly integrated into the platform, PagerDuty empowers teams to accelerate incident detection through resolution, anticipate issues, and drive continuous improvement across their digital operations. Trusted by nearly half of the Fortune 500, half of the Forbes AI 50, as well as approximately two-thirds of the Fortune 100, PagerDuty is essential for delivering always-on digital experiences to modern businesses. Learn more and try it for free at www.pagerduty.com.
The PagerDuty Operations Cloud
The PagerDuty Operations Cloud is an AI-powered platform that automates and orchestrates the entire incident management lifecycle—from detection to resolution, providing resilience at scale. Designed for mission-critical operations, the platform empowers teams to identify and diagnose disruptions in real time, mobilize the right teams to quickly streamline workflows to solve digital issues before they become incidents. The PagerDuty Operations Cloud is essential for delivering flawless, always-on digital experiences that organizations and consumers expect today.
PAGERDUTY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three months ended October 31,
Nine months ended October 31,
2025
2024
2025
2024
Revenue
$
124,545
$
118,946
$
367,761
$
346,053
Cost of revenue (1)
18,357
20,268
56,542
59,691
Gross profit
106,188
98,678
311,219
286,362
Operating expenses:
Research and development (1)
29,418
34,267
94,363
106,878
Sales and marketing (1)
44,322
49,272
138,823
148,737
General and administrative (1)
24,369
25,432
76,715
78,800
Total operating expenses
98,109
108,971
309,901
334,415
Income (loss) from operations
8,079
(10,293
)
1,318
(48,053
)
Interest income
5,700
6,912
17,860
21,408
Interest expense
(2,100
)
(2,377
)
(6,750
)
(6,888
)
Other income, net
50
346
284
212
Income (loss) before (benefit from) provision for income taxes
11,729
(5,412
)
12,712
(33,321
)
(Benefit from) provision for income taxes
(149,673
)
715
(150,725
)
1,335
Net income (loss)
$
161,402
$
(6,127
)
$
163,437
$
(34,656
)
Net loss attributable to redeemable non-controlling interest
(184
)
(203
)
(562
)
(681
)
Net income (loss) attributable to PagerDuty, Inc.
$
161,586
$
(5,924
)
$
163,999
$
(33,975
)
Less: Adjustment attributable to redeemable non-controlling interest
2,031
634
1,164
9,881
Net income (loss) attributable to PagerDuty, Inc. common stockholders
$
159,555
$
(6,558
)
$
162,835
$
(43,856
)
Weighted-average shares used in calculating net income (loss) per share:
Basic
92,836
91,438
92,280
92,530
Diluted
94,662
91,438
94,154
92,530
Net income (loss) per share attributable to PagerDuty, Inc. common stockholders
Basic
$
1.72
$
(0.07
)
$
1.76
$
(0.47
)
Diluted
$
1.69
$
(0.07
)
$
1.73
$
(0.47
)
(1) Includes stock-based compensation expense as follows:
Three months ended October 31,
Nine months ended October 31,
2025
2024
2025
2024
Cost of revenue
$
988
$
1,432
$
3,298
$
4,696
Research and development
8,395
11,576
27,795
34,640
Sales and marketing
5,439
7,639
16,943
23,702
General and administrative
7,753
11,126
26,252
34,041
Total
$
22,575
$
31,773
$
74,288
$
97,079
PAGERDUTY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
October 31, 2025
January 31, 2025
Assets
Current assets:
Cash and cash equivalents
$
324,260
$
346,460
Investments
223,521
224,366
Accounts receivable, net of allowance for credit losses of $1,015 and $1,103 as of October 31, 2025 and January 31, 2025, respectively
78,880
107,350
Deferred contract costs, current
18,385
19,787
Prepaid expenses and other current assets
13,855
13,757
Total current assets
658,901
711,720
Property and equipment, net
27,394
21,335
Deferred contract costs, non-current
24,248
25,279
Lease right-of-use assets
8,105
6,806
Goodwill
137,401
137,401
Intangible assets, net
16,588
20,865
Deferred tax assets
151,470
—
Other assets
3,657
3,860
Total assets
$
1,027,764
$
927,266
Liabilities, redeemable non-controlling interest, and stockholders’ equity
Current liabilities:
Accounts payable
$
6,698
$
7,329
Accrued expenses and other current liabilities
17,283
20,322
Accrued compensation
28,178
37,505
Deferred revenue, current
221,809
243,269
Lease liabilities, current
4,103
3,307
Convertible senior notes, net, current
—
57,426
Total current liabilities
278,071
369,158
Convertible senior notes, net, non-current
395,132
393,282
Deferred revenue, non-current
1,227
2,483
Lease liabilities, non-current
9,291
9,637
Other liabilities
4,725
4,661
Total liabilities
688,446
779,221
Redeemable non-controlling interest
18,819
18,217
Stockholders' equity
Common stock
—
—
Additional paid-in capital
756,061
725,483
Accumulated other comprehensive loss
(206
)
(485
)
Accumulated deficit
(431,171
)
(595,170
)
Treasury stock
(4,185
)
—
Total stockholders’ equity
320,499
129,828
Total liabilities, redeemable non-controlling interest, and stockholders' equity
$
1,027,764
$
927,266
PAGERDUTY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three months ended October 31,
Nine months ended October 31,
2025
2024
2025
2024
Cash flows from operating activities:
Net income (loss) attributable to PagerDuty, Inc. common stockholders
$
159,555
$
(6,558
)
$
162,835
$
(43,856
)
Net loss and adjustment attributable to redeemable non-controlling interest
1,847
431
602
9,200
Net income (loss)
161,402
(6,127
)
163,437
(34,656
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
2,998
5,071
10,082
15,526
Amortization of deferred contract costs
5,647
5,555
16,864
16,261
Amortization of debt issuance costs
590
671
1,921
1,950
Stock-based compensation
22,575
31,773
74,288
97,079
Non-cash lease expense
630
903
1,523
2,538
Impairment of long-lived assets
1,213
—
1,213
—
Deferred income taxes
(150,079
)
536
(151,703
)
521
Other
(525
)
(1,387
)
(1,892
)
(3,852
)
Changes in operating assets and liabilities:
Accounts receivable
(8,549
)
(8,406
)
27,980
24,751
Deferred contract costs
(4,215
)
(5,311
)
(14,458
)
(15,441
)
Prepaid expenses and other assets
787
(2,217
)
359
(5,079
)
Accounts payable
(97
)
(176
)
(556
)
603
Accrued expenses and other liabilities
488
(1,009
)
(4,905
)
(1,823
)
Accrued compensation
(428
)
4,823
(9,760
)
4,002
Deferred revenue
(6,727
)
(1,070
)
(22,657
)
(11,386
)
Lease liabilities
(907
)
(1,556
)
(2,289
)
(4,505
)
Net cash provided by operating activities
24,803
22,073
89,447
86,489
Cash flows from investing activities:
Purchases of property and equipment
(743
)
(552
)
(2,058
)
(1,646
)
Capitalized software costs
(3,131
)
(2,078
)
(7,267
)
(5,019
)
Purchases of available-for-sale investments
(45,092
)
(54,721
)
(137,409
)
(153,121
)
Proceeds from maturities of available-for-sale investments
50,779
54,250
139,689
147,827
Proceeds from sales of available-for-sale investments
—
—
1,248
2,237
Purchases of non-marketable equity investments
—
—
(1,250
)
—
Net cash used in investing activities
1,813
(3,101
)
(7,047
)
(9,722
)
Cash flows from financing activities:
Cash paid for debt issuance costs
—
—
—
(403
)
Repurchases of common stock
(36,138
)
(70,310
)
(36,138
)
(97,523
)
Repayments of convertible senior notes
—
—
(57,500
)
—
Proceeds from employee stock purchase plan
—
—
4,618
5,735
Proceeds from issuance of common stock upon exercise of stock options
129
723
3,939
1,527
Employee payroll taxes paid related to net share settlement of restricted stock units
(6,337
)
(8,531
)
(20,305
)
(22,659
)
Net cash used in financing activities
(42,346
)
(78,118
)
(105,386
)
(113,323
)
Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash
(116
)
(86
)
(3
)
(109
)
Net change in cash, cash equivalents, and restricted cash
(15,846
)
(59,232
)
(22,989
)
(36,665
)
Cash, cash equivalents, and restricted cash at beginning of period
341,185
389,234
348,328
366,667
Cash, cash equivalents, and restricted cash at end of period
$
325,339
$
330,002
$
325,339
$
330,002
Note: Certain reclassifications of prior period amounts have been made in the Company’s condensed consolidated statements of cash flows to conform to the current period presentation. Refer to the notes to our Quarterly Report on Form 10-Q for more information.
Non-GAAP Financial Measures
This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income attributable to PagerDuty, Inc. common stockholders, non-GAAP net income per share attributable to PagerDuty, Inc. common stockholders, free cash flow, and free cash flow margin.
PagerDuty believes that non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past financial performance and can assist in comparisons with other companies, some of which use similar non-GAAP financial measures to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.
The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in PagerDuty’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by PagerDuty’s management about which expenses and income are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each historical non-GAAP financial measure to the most directly comparable financial measure presented in accordance with GAAP.
Specifically, PagerDuty excludes the following from its historical and prospective non-GAAP financial measures, as applicable:
Stock-based compensation: PagerDuty utilizes stock-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of its stockholders and at long-term retention, rather than to address operational performance for any particular period. As a result, stock-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.
Employer taxes related to employee stock transactions: PagerDuty views the amount of employer taxes related to its employee stock transactions as an expense that is dependent on its stock price, employee exercise and other award disposition activity, and other factors that are beyond PagerDuty’s control. As a result, employer taxes related to employee stock transactions vary for reasons that are generally unrelated to financial and operational performance in any particular period.
Amortization of acquired intangible assets: PagerDuty views amortization of acquired intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of purchased intangibles is an expense that is not typically affected by operations during any particular period.
Acquisition-related expenses: PagerDuty views acquisition-related expenses, such as transaction costs, acquisition-related retention payments, and acquisition-related asset impairment, as events that are not necessarily reflective of operational performance during a period. In particular, PagerDuty believes the consideration of measures that exclude such expenses can assist in the comparison of operational performance in different periods which may or may not include such expenses.
Amortization of debt issuance costs: The imputed interest rates of the Company's convertible senior notes (the "2025 Notes" and the "2028 Notes" or, collectively, the "Notes") was approximately 1.91% for the 2025 Notes and 2.13% for the 2028 Notes. This is a result of the debt issuance costs, which reduce the carrying value of the convertible debt instruments. The debt issuance costs are amortized as interest expense. The expense for the amortization of the debt issuance costs is a non-cash item, and we believe the exclusion of this interest expense will provide for a more useful comparison of our operational performance in different periods.
Restructuring costs: PagerDuty views restructuring costs, such as employee severance-related costs and real estate impairment costs, as events that are not necessarily reflective of operational performance during a period. In particular, PagerDuty believes the consideration of measures that exclude such expenses can assist in the comparison of operational performance in different periods which may or may not include such expenses.
Shareholder matters: PagerDuty views certain charges, including third-party legal, consulting, and advisory fees, related to shareholder activity that are outside of the ordinary course of our business and expenses related to a cooperation agreement as events that are not necessarily reflective of operational performance during a period. PagerDuty believes that such charges do not have a direct correlation to the operations of the Company’s business and may vary in size depending on the timing, results, and resolution of such shareholder matters. The consideration of measures that exclude such expenses can assist in the comparison of operational performance in periods which may or may not include such expenses.
Impairment of long-lived assets: PagerDuty views non-cash charges for impairment of long-lived assets, including impairments related to capitalized software costs, office leases, and acquired intangible assets, as events that are not necessarily reflective of operational performance during a period. Impairment charges can vary significantly in terms of amount and timing and PagerDuty believes the exclusion of such adjustments can assist in comparison of operational performance in different periods.
Adjustment attributable to redeemable non-controlling interest: PagerDuty adjusts the value of redeemable non-controlling interest of its joint venture PagerDuty K.K. according to the operating agreement. PagerDuty believes this adjustment is not reflective of operational performance during a period and exclusion of such adjustments can assist in comparison of operational performance in different periods.
Income tax effects and adjustments: Based on PagerDuty's financial outlook for fiscal 2026, PagerDuty is utilizing a projected non-GAAP tax rate of 22%. PagerDuty uses a projected non-GAAP tax rate in order to provide better consistency across the interim reporting periods by eliminating the impact of non-recurring and period specific items, which can vary in size and frequency. PagerDuty's estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that PagerDuty believes materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenue and expenses and other significant events.
Non-GAAP gross profit and non-GAAP gross margin
We define non-GAAP gross profit as gross profit excluding the following expenses typically included in cost of revenue: stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, and restructuring costs. We define non-GAAP gross margin as non-GAAP gross profit as a percentage of revenue.
Non-GAAP operating expenses
We define non-GAAP operating expenses as operating expenses excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, acquisition-related expenses, which include transaction costs, acquisition-related retention payments, and asset impairment, restructuring costs, impairment of long-lives assets, and shareholder matters which are not necessarily reflective of operational performance during a given period.
Non-GAAP operating income and non-GAAP operating margin
We define non-GAAP operating income as income (loss) from operations excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, acquisition-related expenses, which include transaction costs, acquisition-related retention payments, and asset impairment, restructuring costs, shareholder matters, and impairment of long-lived assets which are not necessarily reflective of operational performance during a given period. We define non-GAAP operating margin as non-GAAP operating income as a percentage of revenue.
Non-GAAP net income attributable to PagerDuty, Inc. common stockholders
We define non-GAAP net income attributable to PagerDuty, Inc. common stockholders as net income (loss) attributable to PagerDuty, Inc. common stockholders excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of debt issuance costs, amortization of acquired intangible assets, acquisition-related expenses, which include transaction costs, acquisition-related retention payments and asset impairment, restructuring costs, shareholder matters, impairment of long-lived assets, adjustment attributable to redeemable non-controlling interest, and income tax adjustments, which are not necessarily reflective of operational performance during a given period.
Non-GAAP net income per share, basic and diluted
We define non-GAAP net income per share, basic as non-GAAP net income attributable to PagerDuty, Inc. common stockholders divided by weighted average shares outstanding at the end of the reporting period. We define non-GAAP net income per share, diluted as non-GAAP net income attributable to PagerDuty, Inc. common stockholders divided by weighted average diluted shares outstanding at the end of the reporting period.
Free cash flow and free cash flow margin
We define free cash flow as net cash provided by operating activities, less cash used for purchases of property and equipment and capitalization of internal-use software costs. We define free cash flow margin as free cash flow as a percentage of revenue. In addition to the reasons stated above, we believe that free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash in excess of our capital investments in property and equipment in order to enhance the strength of our balance sheet and further invest in our business and potential strategic initiatives. A limitation of the utility of free cash flow as a measure of our liquidity is that it does not represent the total increase or decrease in our cash balance for the period. We use free cash flow in conjunction with traditional U.S. GAAP measures as part of our overall assessment of our liquidity, including the preparation of our annual operating budget and quarterly forecasts and to evaluate the effectiveness of our business strategies. There are a number of limitations related to the use of free cash flow as compared to net cash provided by operating activities, including that free cash flow includes capital expenditures, the benefits of which are realized in periods subsequent to those when expenditures are made.
PagerDuty encourages investors to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate PagerDuty’s business.
Please see the reconciliation tables at the end of this release for the reconciliation of non-GAAP financial measures to their most-comparable GAAP financial measures.
PAGERDUTY, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except percentages and per share data)
(unaudited)
Three months ended October 31,
Nine months ended October 31,
2025
2024
2025
2024
Non-GAAP gross profit and non-GAAP gross margin
Gross profit
$
106,188
$
98,678
$
311,219
$
286,362
Add:
Stock-based compensation
988
1,432
3,298
4,696
Employer taxes related to employee stock transactions
19
29
87
112
Amortization of acquired intangible assets
506
2,200
2,380
6,875
Restructuring costs
292
—
292
(2
)
Non-GAAP gross profit
$
107,993
$
102,339
$
317,276
$
298,043
Revenue
$
124,545
$
118,946
$
367,761
$
346,053
Gross margin
85.3
%
83.0
%
84.6
%
82.8
%
Non-GAAP gross margin
86.7
%
86.0
%
86.3
%
86.1
%
Non-GAAP operating expenses
Research and development
$
29,418
$
34,267
$
94,363
$
106,878
Less:
Stock-based compensation
8,395
11,576
27,795
34,640
Employer taxes related to employee stock transactions
128
173
615
691
Acquisition-related expenses
—
227
263
750
Amortization of acquired intangible assets
—
—
—
116
Restructuring costs
334
—
1,707
(2
)
Impairment of long-lived assets
1,213
—
1,213
—
Non-GAAP research and development
$
19,348
$
22,291
$
62,770
$
70,683
Sales and marketing
$
44,322
$
49,272
$
138,823
$
148,737
Less:
Stock-based compensation
5,439
7,639
16,943
23,702
Employer taxes related to employee stock transactions
79
128
382
463
Amortization of acquired intangible assets
633
632
1,898
1,897
Restructuring costs
1,055
—
3,287
(10
)
Non-GAAP sales and marketing
$
37,116
$
40,873
$
116,313
$
122,685
General and administrative
$
24,369
$
25,432
$
76,715
$
78,800
Less:
Stock-based compensation
7,753
11,126
26,252
34,041
Employer taxes related to employee stock transactions
106
122
427
463
Acquisition-related expenses
—
—
—
(1
)
Amortization of acquired intangible assets
—
—
—
29
Restructuring costs
406
—
685
24
Shareholder matters
121
—
2,470
—
Non-GAAP general and administrative
$
15,983
$
14,184
$
46,881
$
44,244
Note: Certain figures may not sum due to rounding.
PAGERDUTY, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)
(in thousands, except percentages and per share data)
(unaudited)
Three months ended October 31,
Nine months ended October 31,
2025
2024
2025
2024
Non-GAAP operating income and non-GAAP operating margin
Income (loss) from operations
$
8,079
$
(10,293
)
$
1,318
$
(48,053
)
Add:
Stock-based compensation
22,575
31,773
74,288
97,079
Employer taxes related to employee stock transactions
332
452
1,511
1,729
Amortization of acquired intangible assets
1,139
2,832
4,278
8,917
Acquisition-related expenses
—
227
263
749
Restructuring costs
2,087
—
5,971
10
Shareholder matters
121
—
2,470
—
Impairment of long-lived assets
1,213
—
1,213
—
Non-GAAP operating income
$
35,546
$
24,991
$
91,312
$
60,431
Revenue
$
124,545
$
118,946
$
367,761
$
346,053
Operating margin
6.5
%
(8.7
)%
0.4
%
(13.9
)%
Non-GAAP operating margin
28.5
%
21.0
%
24.8
%
17.5
%
Non-GAAP net income attributable to PagerDuty, Inc. common stockholders
Net income (loss) attributable to PagerDuty, Inc. common stockholders
$
159,555
$
(6,558
)
$
162,835
$
(43,856
)
Add:
Stock-based compensation
22,575
31,773
74,288
97,079
Employer taxes related to employee stock transactions
332
452
1,511
1,729
Amortization of debt issuance costs
590
671
1,921
1,950
Amortization of acquired intangible assets
1,139
2,832
4,278
8,917
Acquisition-related expenses
—
227
263
749
Restructuring costs
2,087
—
5,971
10
Shareholder matters
121
—
2,470
—
Impairment of long-lived assets
1,213
—
1,213
—
Adjustment attributable to redeemable non-controlling interest
2,031
634
1,164
9,881
Income tax effects and adjustments
(158,426
)
(6,310
)
(173,743
)
(16,402
)
Non-GAAP net income attributable to PagerDuty, Inc. common stockholders
$
31,217
$
23,721
$
82,171
$
60,057
Non-GAAP net income per share, basic
Net income (loss) per share attributable to PagerDuty, Inc. common stockholders
$
1.72
$
(0.07
)
$
1.76
$
(0.47
)
Non-GAAP adjustments to net income (loss) per share attributable to PagerDuty, Inc. common stockholders
(1.38
)
0.33
(0.87
)
1.12
Non-GAAP net income per share attributable to PagerDuty, Inc. common stockholders
$
0.34
$
0.26
$
0.89
$
0.65
Non-GAAP net income per share, diluted
Net income (loss) per share attributable to PagerDuty, Inc. common stockholders
$
1.69
$
(0.07
)
$
1.73
$
(0.47
)
Non-GAAP adjustments to net income (loss) per share attributable to PagerDuty, Inc. common stockholders
(1.36
)
0.32
(0.86
)
1.10
Non-GAAP net income per share attributable to PagerDuty, Inc. common stockholders
$
0.33
$
0.25
$
0.87
$
0.63
Weighted-average shares used in calculating net income per share
Basic
92,836
91,438
92,280
92,530
Diluted
94,662
91,438
94,154
92,530
Weighted-average shares used in calculating non-GAAP net income per share
Basic
92,836
91,438
92,280
92,530
Diluted
94,662
94,036
94,154
95,549
Note: Certain figures may not sum due to rounding.
PAGERDUTY, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)
(in thousands, except percentages)
(unaudited)
Three months ended October 31,
Nine months ended October 31,
2025
2024
2025
2024
Free cash flow and free cash flow margin
Net cash provided by operating activities
$
24,803
$
22,073
$
89,447
$
86,489
Purchases of property and equipment
(743
)
(552
)
(2,058
)
(1,646
)
Capitalization of software costs
(3,131
)
(2,078
)
(7,267
)
(5,019
)
Free cash flow
$
20,929
$
19,443
$
80,122
$
79,824
Net cash provided by (used in) investing activities
$
1,813
$
(3,101
)
$
(7,047
)
$
(9,722
)
Net cash used in financing activities
$
(42,346
)
$
(78,118
)
$
(105,386
)
$
(113,323
)
Revenue
$
124,545
$
118,946
$
367,761
$
346,053
Operating cash flow margin
19.9
%
18.6
%
24.3
%
25.0
%
Free cash flow margin
16.8
%
16.3
%
21.8
%
23.1
%