Total Revenue

+7.7% (from $111.17M in Q1 2025 to $119.81M in Q1 2026)

**The revenue increase builds on previous successes in upselling and expanding the existing customer base, with a strong U.S. market presence (72% of total revenue) continuing to drive growth. " " **

Loss from operations

Improved by over 50% (from –$21.73M in Q1 2025 to –$10.33M in Q1 2026)

**Operational efficiencies achieved through cost management and margin improvements (including leveraging new AI features and similar initiatives seen in prior periods) have significantly reduced operating losses. " " **

Net Loss attributable to common stockholders

Reduced by approximately 62% (from –$17.35M in Q1 2025 to –$6.50M in Q1 2026)

**The dramatic drop results from a combination of higher revenue and disciplined control of expenses—reducing factors such as restructuring and stock-based compensation costs—that continued the improvement trend from previous periods. " " **

Revenue (Annual)

FY 2026

$500M to $507M "

$493M to $499M "

lowered

Net Income per Diluted Share (Annual)

FY 2026

$0.90 to $0.95 "

$0.95 to $1 "

raised

Operating Margin (Annual)

FY 2026

19% to 20% "

20% to 21% "

raised

Revenue (Quarterly)

Q1 FY 2026

$118M to $120M "

no current guidance

no current guidance

Net Income per Diluted Share (Quarterly)

Q1 FY 2026

$0.18 to $0.19 "

no current guidance

no current guidance

Operating Margin (Quarterly)

Q1 FY 2026

15% "

no current guidance

no current guidance

Revenue (Quarterly)

Q2 2026

no prior guidance

$122.5M to $124.5M (growth of 6% to 7%) "

no prior guidance

Net Income per Diluted Share (Quarterly)

Q2 2026

no prior guidance

$0.19 to $0.20 "

no prior guidance

Operating Margin (Quarterly)

Q2 2026

no prior guidance

17% "

no prior guidance

Trailing 12-Month Billings Growth (Quarterly)

Q2 2026

no prior guidance

7% " "

no prior guidance

Enterprise Growth & Pipeline Expansion

In Q4 2025, Q3 2025, and Q2 2025 calls the focus was on deepening strategic, multiyear, multiproduct enterprise contracts and building stronger, high‐value pipelines with rigorous visibility and disciplined execution. " " " "

Q1 2026 emphasized a transformation to strategic, deep cross-company relationships, highlighted enterprise account expansion and maturing the sales team, while noting a strong pipeline demand driven by AI-enhanced solutions. " " " "

Recurring emphasis on enterprise growth continues with an evolving focus on strategic relationships and pipeline quality; the sentiment is increasingly positive as the company scales its enterprise coverage and leverages AI to drive future growth.

AI and Automation

Previous periods (Q2–Q4 2025) highlighted the launch and expansion of PagerDuty Advance, integration of AIOps, generative AI and automation features, and product diversification to capture cost-savings and drive incremental ARR. " " " "

In Q1 2026, the discussion deepened on expanding generative AI capabilities, introducing new AI agents, and further integrating AI Ops into incident management and automation workflows, reinforcing strategic positioning in an AI-first operating environment. " " " "

Continuous investment and stronger product differentiation through AI remain central; the evolution shows accelerated deployment of AI features and enhanced integration, reinforcing its long-term impact on the platform.

Operational Efficiency and Margin Improvement

Across Q2–Q4 2025, management detailed improvements in gross and operating margins, disciplined cost control, enhanced sales efficiency, and stable free cash flow, with targets steadily rising. " " " "

Q1 2026 reported achieving a 20% non-GAAP operating margin, clear progress toward GAAP profitability, and continued cost optimization (e.g. reduced personnel costs and stock-based compensation), supporting a long-term target of 30% margin. " " " "

Consistent positive progress with margins improving period-over-period; sentiment remains upbeat as operational efficiencies are further optimized to support long-term profitability.

Sales Execution and Transformation Challenges

Q2–Q4 2025 discussions focused on adapting to evolving customer buying behaviors, transitioning from a transactional to a value-led, top-down sales approach, and addressing longer sales cycles while gradually improving pipeline execution. " " "

In Q1 2026, the company acknowledged temporary execution gaps caused by organizational transitions, noted intentional changes to build a more strategic enterprise sales force, and recognized short-term revenue impact, expecting improvements later in the year. " " " "

Recurring transformation challenges persist; however, there is a clear upward shift toward hiring more experienced, enterprise-focused talent which is expected to yield improved execution and stronger long-term results despite near-term disruptions.

Revenue Guidance and Deferred Revenue Concerns

Q2–Q4 2025 calls provided detailed revenue guidance adjustments due to timing issues (e.g., professional services lags, shorter quarters) and discussed deferred revenue elements such as Remaining Performance Obligations and billings, with cautious but steady outlooks. " " " "

Q1 2026 guidance reflects similar subscription-based revenue recognition challenges, with updated ranges indicating modest growth and highlighting that booking improvements will primarily benefit future periods; no new deferred revenue concerns were explicitly raised. " "

Guidance remains cautiously optimistic with deferred revenue issues continuing to affect current quarter performance; improvements in execution are expected to translate into future fiscal periods while overall long-term revenue trends remain positive.

Customer Churn and SMB/Commercial Segment Challenges

In Q2–Q4 2025, elevated churn in the SMB segment and negative growth issues were highlighted, although there were early signs of stabilization and modest recovery, particularly with small tech startups and commercial initiatives. " " "

Q1 2026 again noted elevated churn particularly in the SMB segment, along with enterprise downgrades linked to factors like mergers and macro uncertainty; however, strong new logo growth and targeted post-sales improvements (including a new Chief Customer Officer) were also underscored. " " "

Recurring SMB/churn challenges persist, though strategic adjustments and improved acquisition signals are emerging; overall sentiment remains cautiously optimistic with clear initiatives to stabilize and reverse negative trends in the segment over time.

Competitive Landscape and Market Dynamics

Q2–Q4 2025 emphasized differentiated platform capabilities (including AI Ops), competitive resilience during outages, and strategic wins over legacy vendors, with some focus on mid-market pricing pressures versus enterprise reliability. " " "

In Q1 2026, competitive wins were highlighted through large, strategic deals, displacement of competitors in global markets, and international expansion, reinforcing confidence in PagerDuty's leadership in digital operations and AI-enhanced solutions. " "

The competitive narrative remains strong and increasingly positive, with continued differentiation and successful global wins; the company’s focus on innovation and strategic displacement supports its market-leading positioning.

Leadership and Organizational Changes

Q2–Q4 2025 communications discussed multiple leadership appointments, talent rotations, and search efforts (such as for CRO), alongside strategic changes in go-to-market and product leadership designed to align with evolving sales and operational strategies. " " " "

Q1 2026 detailed further leadership changes including a new Chief Customer Officer, an ongoing search for a Chief Revenue Officer, board enhancements, and an ongoing transformation of the enterprise sales team, acknowledging current transitional challenges while stressing long-term improvements. " " " "

Ongoing leadership evolution remains a constant theme; the organizational changes are designed to boost strategic execution and reinforce enterprise focus, with continued adjustments seen as key to overcoming execution gaps and driving future growth.