Digital operations platform PagerDuty (NYSE: PD) reported Q1 CY2026 results beating Wall Street’s revenue expectations, but sales were flat year on year at $121 million. The company expects next quarter’s revenue to be around $123 million, close to analysts’ estimates. Its non-GAAP profit of $0.33 per share was 33.2% above analysts’ consensus estimates.
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PagerDuty (PD) Q1 CY2026 Highlights:
- Revenue: $121 million vs analyst estimates of $119.6 million (flat year on year, 1.2% beat)
- Adjusted EPS: $0.33 vs analyst estimates of $0.25 (33.2% beat)
- Adjusted Operating Income: $29.74 million vs analyst estimates of $22.94 million (24.6% margin, 29.7% beat)
- The company reconfirmed its revenue guidance for the full year of $492.5 million at the midpoint
- Management raised its full-year Adjusted EPS guidance to $1.30 at the midpoint, a 3.2% increase
- Operating Margin: 7.6%, up from -8.6% in the same quarter last year
- Free Cash Flow Margin: 34.1%, up from 18.1% in the previous quarter
- Customers: 15,380, up from 15,351 in the previous quarter
- Billings: $115.6 million at quarter end, up 1.6% year on year
- Market Capitalization: $551.1 million
Company Overview
Born from the frustration of developers being woken up by unprioritized alerts, PagerDuty (NYSE: PD) is a digital operations management platform that helps organizations detect and respond to IT incidents, outages, and other critical issues in real-time.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, PagerDuty grew its sales at a 16.8% annual rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the software sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.
Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. PagerDuty’s recent performance shows its demand has slowed as its annualized revenue growth of 6.1% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
This quarter, PagerDuty’s $121 million of revenue was flat year on year but beat Wall Street’s estimates by 1.2%. Company management is currently guiding for flat sales next quarter.
Looking further ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will face some demand challenges.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
PagerDuty’s billings came in at $115.6 million in Q1, and over the last four quarters, its growth was underwhelming as it averaged 1.2% year-on-year increases. This alternate topline metric grew slower than total sales, meaning the company recognizes revenue faster than it collects cash - a headwind for its liquidity that could also signal a slowdown in future revenue growth. 
Customer Base
PagerDuty reported 15,380 customers at the end of the quarter, a sequential increase of 29. That’s a little better than last quarter but a bit below what we’ve seen over the previous year. This indicates the company is optimizing its go-to-market strategy to reinvigorate growth.
Key Takeaways from PagerDuty’s Q1 Results
We were impressed by PagerDuty’s strong growth in customers this quarter. We were also glad its full-year EPS guidance exceeded Wall Street’s estimates. On the other hand, its EPS guidance for next quarter missed and its full-year revenue guidance was in line with Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The stock traded up 14.7% to $8.52 immediately following the results.
Is PagerDuty an attractive investment opportunity right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
