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1. Company Snapshot

1.a. Company Description

PagerDuty, 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.

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1.b. Last Insights on PD

The recent performance of PagerDuty, Inc. has been negatively impacted by analyst downgrades, with Canaccord Genuity Group lowering its price target from $19.00 to $9.00, citing concerns about the company's growth prospects. This downgrade has contributed to a decline in investor sentiment, with shares reaching a new 52-week low. Additionally, SG Americas Securities LLC decreased its holdings in PagerDuty by 57.2% in the latest quarter, further exacerbating the negative sentiment.

1.c. Company Highlights

2. PagerDuty: Profitability, AI Momentum, and Margins on the Rise

PagerDuty delivered a solid fourth‑quarter and full‑year performance, reporting $125 million in revenue, up 3% YoY, and a non‑GAAP operating margin of 24%—well above the guidance range. GAAP net income hit $174 million, largely buoyed by a $169 million one‑time tax benefit, while free cash flow reached $23 million, or 18% of revenue. EPS came in at $0.29 versus analyst estimates of $0.24, underscoring disciplined cost control and efficient scaling. The company’s valuation sits at a P/E of 3.2 and an EV/EBITDA of 19.2, reflecting modest price pressure amid rapid margin expansion.<sup>[Tejada, Q4 Call]</sup>

Publication Date: Apr -16

📋 Highlights
  • ARR Growth and Stabilization: Total annual recurring revenue reached $499 million, stabilizing in Q4 with increased enterprise contribution.
  • Non-GAAP Margin Expansion: Non-GAAP operating margin hit 24%, up 700 basis points year-over-year, driven by cost efficiencies and AI adoption.
  • New and Expansion Business Momentum: New and expansion business rose 6% YoY and 37% sequentially, with over 40 $100k+ deals closed in Q4.
  • AI Ecosystem and Platform Adoption: Platform customers grew to 35,000 (+14% YoY), with AI integration enhancing customer retention and expansion.

Margin Expansion

PagerDuty’s non‑GAAP operating margin grew nearly 700 basis points from the prior year, driven by disciplined execution, structural efficiency initiatives, and AI‑enabled automation. Non‑GAAP gross margin hit 87%, surpassing the high end of the target range, and operating income climbed to $30 million, or 24% of revenue. These gains underscore the company’s ability to convert revenue growth into profitability without sacrificing product investment.

Revenue Growth & Recurring Base

Annual recurring revenue (ARR) edged up 1% YoY to $499 million, with a 6% increase in international revenue and a 14% YoY rise in total platform customers to 35,000+. New and expansion sales were the strongest segment of the fiscal year, up 6% year‑over‑year and 37% sequentially, reflecting robust demand from enterprise clients.

AI Ecosystem Impact

The company’s AI ecosystem expansion—integrating platform agents with leading AI data platforms—has resonated with customers, who are doubling down on AI investments. PagerDuty positions itself as the operations platform of choice for AI‑native enterprises, leveraging a decade‑plus moat of data, incident, and service context to deliver resilience and automation.

Pricing Transition

PagerDuty is actively shifting customers to a flexible, usage‑based pricing model. Early adoption has been positive, especially among large enterprises that value reduced friction and access to new products. The transition is expected to improve gross retention, with dollar‑based net retention at 98% after targeted renewal initiatives.

Customer Retention & RPO

Dollar‑based net retention was 98%, with a slight dip in gross retention due to seat compression. The company has implemented programmatic renewal initiatives and strengthened customer management to reverse this trend. Total RPO stands at $449 million, with $314 million expected to be recognized over the next 12 months, indicating a healthy pipeline.

Future Outlook

Guidance for FY 2027 projects flat revenue growth ($488.5 M–$496.5 M) but higher quality earnings and continued margin expansion. The focus remains on large enterprise and AI‑first segments, leveraging flexible pricing, AI ecosystem depth, and a robust go‑to‑market organization to accelerate growth and profitability while maintaining a strong cash position.

3. NewsRoom

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Precision Drilling Announces 2026 First Quarter Unaudited Financial Statements

00:58

Source: globenewswire.com

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Massachusetts Financial Services Co. MA Sells 96,828 Shares of PagerDuty $PD

Apr -19

Source: defenseworld.net

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Precision Drilling (NYSE:PDS) Shares Down 7.1% – Should You Sell?

Apr -19

Source: defenseworld.net

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Analysts Set Precision Drilling Co. (TSE:PD) PT at C$143.50

Apr -16

Source: defenseworld.net

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SG Americas Securities LLC Lowers Holdings in PagerDuty $PD

Apr -07

Source: defenseworld.net

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JPMorgan Chase & Co. Has $2.12 Million Position in Precision Drilling Corporation $PDS

Apr -07

Source: defenseworld.net

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Precision Drilling Corporation (NYSE:PDS) Receives Average Rating of “Moderate Buy” from Analysts

Apr -01

Source: defenseworld.net

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PagerDuty, Inc. Investigated by the Portnoy Law Firm

Mar -30

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.07%)

6. Segments

Digital Operations Management

Expected Growth: 14.07%

PagerDuty's Digital Operations Management growth is driven by increasing adoption of digital transformation, rising demand for real-time incident response, and growing need for automation and AI-powered IT operations. Additionally, the shift to remote work and cloud-based infrastructure has accelerated the need for proactive issue detection and resolution, further fueling growth.

7. Detailed Products

Incident Response

PagerDuty's incident response product helps teams respond to incidents quickly and efficiently, reducing downtime and improving overall system reliability.

Digital Operations

PagerDuty's digital operations product provides real-time visibility into system performance, enabling teams to detect and resolve issues before they impact customers.

Event Management

PagerDuty's event management product helps teams automate and orchestrate incident response, reducing noise and improving mean time to detect (MTTD) and mean time to resolve (MTTR).

AIOps

PagerDuty's AIOps product uses machine learning and automation to help teams detect and resolve complex issues, reducing noise and improving incident response.

Customer Service Operations

PagerDuty's customer service operations product helps teams provide exceptional customer experiences, reducing resolution time and improving customer satisfaction.

8. PagerDuty, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

PagerDuty's services are highly specialized and integrated with other IT tools, making it difficult for customers to find substitutes. However, the threat of substitutes is still present due to the presence of other incident management and response tools.

Bargaining Power Of Customers

PagerDuty's customers are largely enterprise-level companies that require customized solutions, giving them limited bargaining power. Additionally, the company's subscription-based model and high switching costs further reduce customer bargaining power.

Bargaining Power Of Suppliers

PagerDuty's suppliers are primarily cloud infrastructure providers, and the company has a diversified supplier base, reducing dependence on any single supplier. This limits the bargaining power of suppliers.

Threat Of New Entrants

The incident management and response market is highly competitive, and new entrants can easily replicate PagerDuty's services. However, the company's strong brand recognition, established customer base, and high switching costs for customers mitigate this threat to some extent.

Intensity Of Rivalry

The incident management and response market is highly competitive, with several established players and new entrants vying for market share. PagerDuty faces intense competition from companies like Splunk, New Relic, and Datadog, among others.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 72.58%
Debt Cost 3.95%
Equity Weight 27.42%
Equity Cost 8.59%
WACC 5.22%
Leverage 264.69%

11. Quality Control: PagerDuty, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Olo

A-Score: 5.3/10

Value: 3.3

Growth: 8.2

Quality: 5.1

Yield: 0.0

Momentum: 8.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Matterport

A-Score: 4.4/10

Value: 6.4

Growth: 4.9

Quality: 4.0

Yield: 0.0

Momentum: 8.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
PagerDuty

A-Score: 4.0/10

Value: 4.4

Growth: 7.8

Quality: 6.3

Yield: 0.0

Momentum: 1.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Jamf

A-Score: 3.9/10

Value: 4.8

Growth: 5.8

Quality: 4.9

Yield: 0.0

Momentum: 3.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Bumble

A-Score: 3.4/10

Value: 9.8

Growth: 4.0

Quality: 3.8

Yield: 0.0

Momentum: 1.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
WM Technology

A-Score: 3.4/10

Value: 8.1

Growth: 3.0

Quality: 6.7

Yield: 0.0

Momentum: 1.5

Volatility: 1.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.49$

Current Price

6.5$

Potential

-0.00%

Expected Cash-Flows