PagerDuty reported its fiscal 2027 second-quarter results on Thursday, Aug. 27, 2026, with annual recurring revenue crossing $500 million for the first time to reach $501 million, but the milestone came alongside a 15% workforce reduction and revenue growth of just 1%. Dollar-based net retention landed at 98%, which management called a sequential inflection, and customers paying more than $100,000 a year rose to 884, up 24 from the prior quarter. Non-GAAP operating margin came in at 23.7%, ahead of guidance, with $4.7 million in net income, $32.8 million in free cash flow, and non-GAAP earnings per diluted share of $0.32. The company raised full-year revenue guidance to $491.5 million to $496.5 million and non-GAAP operating margin guidance to 25% to 26%, while announcing new deals including a 36-month, nearly $3 million agreement with a large enterprise software platform and an $850,000 three-year usage-based deal with a financial services firm. However, total revenue was $124.4 million, up only 1% year over year, and third-quarter guidance of $123 million to $125 million remains roughly flat, prompting the workforce cut of about 15% in non-customer-facing roles, with restructuring charges of $5.5 million to $7.5 million. CEO John DiLullo cautioned that the retention work is not over and flagged risks from autonomous agents, while hedge fund ownership fell from 29 to 25 funds and short interest stands at 13.35% of the float.
Pagerduty IncARR milestone and raised guidance are positive, but 15% workforce cut and flat growth are negative, creating mixed impact.
