Summary
PagerDuty's fiscal 2025 second quarter revenue rose 7.7% year over year to $115.9 million. First-half revenue was $227.1 million, also up 7.7%. Quarterly gross profit increased 9.2% to $95.9 million, and first-half gross profit rose 8.4% to $187.7 million. Gross margin widened to 82.7%. The operating loss narrowed to $16.0 million, and operating margin improved to negative 13.8%. Net loss attributable to the company narrowed to $10.9 million, and the first-half net loss narrowed to $28.1 million. Diluted loss per share narrowed to $0.14 for the quarter, though it widened year to date to $0.40.
Cash generation was the standout. Operating cash flow for the quarter was $35.8 million, up from a year earlier, and first-half operating cash flow rose 95.8% to $64.4 million. Free cash flow, a non-GAAP measure, was $33.3 million. Capital expenditures were $0.64 million, down 10.7% year over year. Deferred revenue at quarter end was $217.9 million, up 10.8%. Remaining performance obligations jumped 136.1% to $403 million. Management said it expects to recognize about 70% of the RPO total over the next 12 months, with the balance recognized thereafter. The RPO figure now includes contracts with an original term of less than 12 months, a disclosure change that began this fiscal year.
Customer metrics were mixed. PagerDuty ended the quarter with 820 customers generating more than $100,000 in annual recurring revenue, up 6% from 773 a year earlier. Customers with ARR above $500,000 grew more than 20%. Total paid customers slipped to 15,044 from 15,146. Dollar-based net retention rate fell to 106% from 114%. Free and paid customers totaled more than 29,000, roughly 12% growth year over year. On a non-GAAP basis, operating income was $20.1 million and operating margin was 17.3%, which the company said marked its eighth consecutive quarter of non-GAAP profitability. Non-GAAP net income per diluted share was $0.21.
Operational highlights centered on the PagerDuty Operations Cloud and generative AI. The company expanded PagerDuty Advance with AI-powered capabilities and announced an integration with Snowflake Trail. It cited land-and-expand wins with Aon, Commonwealth Bank of Australia, Coupa, FirstRand Bank, Moderna, Snowflake, Western Digital, and Vodafone. A company study found that customer-facing incidents increased 43% over the past year, with each incident costing nearly $800,000. Revenue growth for the quarter came primarily from existing customers through more users and upsell of additional products.
Guidance for the third quarter of fiscal 2025 calls for revenue growth of 6% to 8% year over year and non-GAAP net income per diluted share of $0.16 to $0.17. For the full fiscal year 2025, PagerDuty lowered its revenue outlook to $463.0 million to $467.0 million from $471.0 million to $477.0 million, still implying growth of 7% to 8%. The company raised full-year non-GAAP net income per diluted share guidance to $0.67 to $0.72 from $0.66 to $0.71. Risks include unfavorable industry or global economic conditions, reductions in information technology spending, the ability to attract and retain customers, the ability to sustain growth, dependence on a single product, and competition. Management also pointed to global inflation, high interest rates, recession risk, and geopolitical conflicts. PagerDuty repurchased shares under a $100.0 million program and had $72.0 million remaining available as of July 31, 2024.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $115.9M | $111.2M | +4.3% | $107.6M | +7.7% |
| Gross profit | $95.9M | $91.8M | +4.4% | $87.8M | +9.2% |
| Gross margin | 82.7% | 82.6% | +0.1 pp | 81.6% | +1.1 pp |
| Research & development | $35.1M | $37.5M | -6.5% | $36.4M | -3.7% |
| Sales & marketing | $51.0M | $48.5M | +5.1% | $49.7M | +2.5% |
| General & administrative | $25.8M | $27.5M | -6.2% | $27.8M | -7.1% |
| Total operating expenses | $111.9M | $113.6M | -1.5% | $114.0M | -1.8% |
| Operating income (loss) | -$16.0M | -$21.7M | +26.3% | -$26.2M | +38.8% |
| Operating margin | -13.8% | -19.6% | +5.7 pp | -24.3% | +10.5 pp |
| Net income (loss) | -$11.2M | -$17.3M | +35.5% | -$22.6M | +50.6% |
| Net margin | -9.7% | -15.6% | +5.9 pp | -21.0% | +11.4 pp |
| Diluted EPS | -$0.14 | -$0.26 | +$0.12 | -$0.26 | +$0.12 |
| Customers | 15,146 | 15,089 | +0.4% | 15,174 | -0.2% |
| Net retention rate | 106.0% | 106.0% | ±0.0 pp | 114.0% | -8.0 pp |
Risks
The filing states that PagerDuty and the third parties it relies on have experienced and will continue to experience cyber-attacks and other incidents, with potential consequences including regulatory investigations, litigation, fines, operational disruptions, reputational harm, and loss of revenue or profits. It also warns that threats are increasingly difficult to detect and may be facilitated by AI.
The filing warns that sensitive data could be leaked, disclosed, or revealed through employees', personnel's, or vendors' use of generative AI technologies, including PagerDuty's own, and that data input into an AI/ML platform could be disclosed to others if used to train third-party models.
Dollar-based net retention rate for all customers decreased to 106% for the last 12 months ended July 31, 2024 from 114% for 2023, and total customers decreased to 15,044 from 15,146 as of July 31, 2024, which may indicate slower expansion or higher churn.
PagerDuty is increasingly building AI capabilities into its products, and the filing warns that AI/ML technologies may be insufficient, biased, inaccurate, or poor quality, leading to customer rejection, reputational harm, or legal liability. Complying with multiple AI regulations across jurisdictions could increase costs or impede offering certain products and services.
SaaS KPIs
All quarters →Free Cash Flow Margin
Non-GAAP Operating Margin
Free Cash Flow
Dollar-Based Net Retention Rate
Total Paid Customers
Non-GAAP Operating Income
Customers > $100K ARR
Free and Paid Customers
Remaining Performance Obligations
Summary, forecast, risks and KPIs are extracted from PagerDuty, Inc.'s SEC filings for Q2 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.