PagerDuty, Inc. reported second-quarter fiscal 2027 revenue of $124.4 million, up 0.8% year over year, with non-GAAP diluted EPS of $0.32 and Annual Recurring Revenue (ARR) crossing $501 million for the first time.

The company also posted its fifth consecutive quarter of GAAP profitability, with net income attributable to common stockholders of $4.7 million. Non-GAAP operating income came in at $29.5 million, representing a non-GAAP operating margin of 23.7%. Free cash flow for the quarter was $32.8 million.

Key Financial Highlights

The table below summarises Q2 FY27 performance against the prior-year period.

Net cash provided by operating activities was $36.9 million. The company held cash, cash equivalents, and investments of $470.0 million as of July 31, 2026.

Operational Metrics

Key customer and retention metrics as of July 31, 2026 are presented below.

Notable customer expansions during the quarter included Anthropic, PBC; Banco Pichincha, C.A.; CoreWeave, Inc.; Delivery Hero SE; Kawasaki Heavy Industries, Ltd.; and Palo Alto Networks, Inc.

What the Numbers Show

Earnings growth significantly outpaced revenue expansion. While top-line growth was marginal at 0.8%, non-GAAP diluted EPS improved 6.67% year over year, reflecting continued operational leverage. GAAP operating income expanded to $10.2 million from $3.6 million in the prior-year quarter, indicating meaningful improvement in profitability on a reported basis even as non-GAAP operating margin contracted slightly from 25.4% to 23.7%.

CEO John DiLullo commented: "We delivered revenue above the high end of our guidance range, crossed $500 million in ARR, and generated $33 million in free cash flow this quarter, providing encouraging signals that our strategy is gaining traction. Non-GAAP operating income also came in ahead of expectations and we enjoyed our fifth consecutive quarter of GAAP profitability. AI is transforming how software is built and operated, and PagerDuty is uniquely positioned to benefit from that shift."

Leadership and Product Developments

During and after the quarter, PagerDuty made several leadership changes:

• Appointed John DiLullo as Chief Executive Officer
• Named Eric Prengel as Chief Financial Officer; announced the retirement of Howard Wilson
• Appointed Alex Shootman to the Board of Directors

On the product side, major upgrades were made to the company's autonomous SRE agent, incident management lifecycle integration, and its agentic offering for on-call shift management. PagerDuty also announced a distribution agreement in Australia with Ingram Micro.

Financial Outlook

For the third quarter of fiscal 2027, PagerDuty expects:

For the full fiscal year 2027, the company expects:

The Q3 and full-year EPS guidance assumes approximately 80 million diluted shares and a non-GAAP tax rate of 20%.

PagerDuty (NYSE: PD) raised its full-year fiscal 2027 adjusted earnings per share guidance to a range of $1.33 to $1.37, surpassing the analyst estimate of $1.32. The company also increased its FY27 sales outlook to between $491.500 million and $496.500 million, compared to the prior guidance of $488.500 million–$496.500 million and an analyst consensus of $494.220 million.

The upward revision in both profitability and top-line metrics signals stronger-than-expected operational performance for the remainder of the fiscal year. By lifting the midpoint of its EPS guidance above the street estimate, PagerDuty indicates confidence in maintaining or expanding margins while driving revenue growth.

What the Numbers Show

The revised sales guidance places the company’s expected revenue firmly around the analyst consensus, with the new upper bound of $496.500 million exceeding the $494.220 million estimate. Simultaneously, the EPS raise suggests that cost discipline or operational leverage is supporting profit growth independently of revenue volume alone.