Total Revenue

+9% (from $111.11M to $121.44M)

Total Revenue increased by 9% YoY primarily driven by strong performance both in U.S. ($86.94M) and International ($34.5M) segments, which underpinned overall revenue growth by expanding market reach and customer adoption ( " " ).

Gross Profit

~12% increase (from $90.76M to $101.47M)

Gross Profit improved by roughly 12% YoY as enhanced operational efficiency and better cost management drove the margin expansion, reflecting improvements in underlying business operations ( " " ).

Loss from Operations

Reduced from -$33.43M to -$11.72M

Loss from Operations narrowed by over 65% YoY due to a blend of revenue growth, cost control improvements, and stabilization of operating expenses, which significantly improved operating margins compared to the previous period ( " " ).

Net Loss attributable to Common Stockholders

Reduced from -$30.63M to -$10.60M

Net Loss improved substantially YoY, driven by better operating performance, as higher revenue and a reduction in operating expenses contributed to lowering the loss, further reflected in an improvement of net loss per share from -$0.34 to -$0.12 ( " " ).

Revenue (Quarterly)

Q1 FY 2026

$118.5M to $120.5M, growth rate 7%–8% "

$118M to $120M, growth rate 6%–8% "

lowered

Net Income per Diluted Share (Quarterly)

Q1 FY 2026

$0.15 to $0.16 "

$0.18 to $0.19 "

raised

Operating Margin (Quarterly)

Q1 FY 2026

13% "

15% "

raised

Non-GAAP Tax Rate (Quarterly)

Q1 FY 2026

no prior guidance

22% "

no prior guidance

Revenue (Annual)

FY 2026

$464.5M to $466.5M, growth rate 8% "

$500M to $507M, growth rate 7%–8% "

raised

Net Income per Diluted Share (Annual)

FY 2026

$0.78 to $0.79 "

$0.90 to $0.95 "

raised

Operating Margin (Annual)

FY 2026

16% "

19%–20% "

raised

Enterprise Segment Growth

Consistently highlighted across Q1–Q3 as key to driving ARR with strong emphasis on multiyear, multiproduct deals and robust growth in key verticals (e.g., " " in Q1; " " in Q2; " " in Q3).

In Q4, the focus remains on enterprise growth with enhanced traction through multiyear, multiproduct platform partnerships, higher ARR cohort counts, and large deal wins (e.g., customers exceeding $100K, $500K, and $1M ARR) ( " " ).

Consistent emphasis with evolving deal structures and improved win rates.

Large Deal Expansion

Q1–Q3 featured discussions about multiproduct, multiyear contracts, with challenges like deferred deals (e.g., Q3 deferrals " " and solid six-figure expansions in Q1 " " ).

Q4 emphasized large deal expansion with notable examples of impressive ROI, scalability, and platform benefits (e.g., financial institution, semiconductor supplier, telecom provider, media enterprise) ( " ).

Persistent focus with higher profile and more strategic wins in Q4.

ARR Acceleration and Pipeline Management

Throughout Q1–Q3, management consistently expressed confidence in building a strong multi-quarter pipeline and anticipated ARR acceleration despite deal deferrals and longer sales cycles ( " " in Q1; " " and improved visibility in Q2; " " in Q3).

In Q4, the narrative centers on expecting ARR acceleration in the back half of the year, driven by improved pipeline quality and velocity along with new sales leadership initiatives ( " " ).

Steady focus with an optimistic outlook for acceleration despite near-term challenges.

Product Diversification Beyond Incident Management

Q1–Q3 consistently discussed the strong contribution of AIOps, Automation, and Customer Service Operations to net new ARR, with multiproduct adoption rapidly increasing (see Q1 " " " , Q2 " , and Q3 " " " ).

In Q4, diversification remains central as over 40% contribution to incremental ARR is noted for these offerings; new use cases and products (e.g., PD Advance and generative AI) further cement the strategic shift away from a pure incident management focus ( " " ).

Growing importance with expanded product use cases and increasing revenue share.

Sales Execution Challenges and Lengthening Sales Cycles

Across Q1–Q3, challenges were noted regarding shifting from a high-velocity, transactional model to a more complex, procurement-led, enterprise sales motion—with issues such as deferred large deals and longer cycles ( " " in Q1; " " and pipeline discipline in Q2; " " " in Q3).

In Q4, executives reiterate the need for transitioning to a top-down enterprise selling approach with enhanced account management and new sales talent; improved multi-threading is aimed at reducing cycle lengths though some execution gaps persist ( " " , " ).

Ongoing challenge with gradual execution improvements and structural transformation.

SMB Segment Underperformance and High Churn

Q1–Q3 consistently noted the SMB segment as a headwind marked by high churn, downgrades, and negative growth (e.g., Q1 " " " , Q2 " " , and Q3 indications of a flattening trend " " ).

In Q4, while the SMB segment still shows underperformance, management noted a modest recovery and opportunities to revisit segment management, acknowledging potential growth from tech startups evolving to larger accounts ( " ).

Persistent challenge with slight early recovery signals but still a weak contributor.

Leadership Changes and Sales Transformation Risks

Leadership evolution was less emphasized in Q1–Q2 (with Q1 having no mention and Q2 hinting at organizational evolution) while Q3 introduced new leadership in key roles and standardized motions ( " " ).

In Q4, extensive leadership changes are front and center with new sales leaders, CRO search, and executive appointments aimed at addressing sales transformation risks; while new hires are expected to ramp up over time, near-term execution risks remain ( " " " " ).

Increased focus with a proactive reshuffle to address transformation challenges.

Competitive Pressures from New Entrants

Earlier quarters (Q1–Q2) touched on competitive pressures indirectly, noting differentiation through longstanding AIOps and integrated platforms; Q3 explicitly addressed competitors like Datadog with emphasis on unique platform strengths ( " in Q1; " " in Q2; " in Q3).

In Q4, competitive intensity is acknowledged particularly regarding product marketing and sales; however, management reinforces PagerDuty's differentiated, resilient platform and strong retention figures as key countermeasures ( " ).

Steady recognition of competition with increasing emphasis on differentiation and customer value.

Pricing Strategy Transitions and Revenue Unpredictability

Across Q1–Q3, transitions from seat-based to flexible, consumption-based models were discussed along with inherent revenue variability, caused by seasonal deal closings and contract co-terming (e.g., Q1 " ; Q2 " " ; Q3 " ).

In Q4, pricing transitions continue with plans to better align pricing to value and account for shifting customer buying behavior, while near-term revenue unpredictability remains a challenge as the enterprise model matures ( " " ).

Consistent evolution with continued short-term unpredictability amid strategic long-term alignment.

Operational Efficiency Improvements and Margin Expansion

Q1–Q3 consistently emphasized operational discipline, with improvements in non-GAAP operating margins, free cash flow, and cost management measures (e.g., Q1 margins above guidance " " ; Q2 efficiencies " " ; Q3 margin expansion from 14% to 21% " ).

Q4 reports robust efficiency gains with nearly 500 basis point operating margin expansion, stronger free cash flow margins, cost management initiatives, and an increased long-term margin target ( " " " ).

Clearly positive and progressive, reflecting ongoing cost discipline and margin improvement initiatives.

Seasonality Effects and Decelerating Billings Growth

Throughout Q1–Q3, seasonality was noted as influencing revenue patterns due to enterprise focus leading to end-of-quarter spikes; decelerating billings were noted with trailing 12-month growth figures slightly below targets ( " in Q1; " in Q2; " " in Q3).

In Q4, seasonality is seen through a gradual ramp in ARR through the year and decelerated billings growth around 8% YoY, with management adjusting expectations and relying more on ARR metrics to smooth out timing discrepancies ( " " ).

Remaining a concern with adjustments underway; recognition of inherent seasonal and booking complexities.

Macroeconomic Uncertainties Impacting Growth

Q1–Q3 consistently recognized a challenging macroeconomic backdrop impacting customer spending and prolonging sales cycles, with management noting the “new normal” and focusing on enterprise deals to weather these headwinds ( " " in Q1; " " in Q2; " " in Q3).

In Q4, macro uncertainties are again underscored as influencing customer ROI focus and sales execution changes; however, a prudent guidance approach and renewed emphasis on digital optimization are highlighted as means to mitigate these risks ( " " ).

Persistent headwinds with a cautious yet adaptive strategic response.