Summary
PagerDuty closed the third quarter of fiscal 2025 with revenue of $118.9 million, up 9.4% from the prior-year quarter. Gross profit rose 10.9% to $98.7 million, and gross margin was 83.0%, up 1.1 percentage points. The company still posted a loss from operations of $10.3 million, but that loss narrowed 50.6% from the prior-year quarter. Operating margin was negative 8.7%, up 10.5 percentage points. Management pointed to stabilization across all business segments and improving leading indicators.
Net loss attributable to PagerDuty was $5.9 million, and diluted loss per share was $0.07, narrowing 53.6% and 56.2% respectively from the prior-year quarter. Operating cash flow was $22.1 million for the quarter, up 30.5%, and $86.5 million for the nine months, up 73.6%. Capital expenditures were $0.55 million in the quarter, up 125.3%. Free cash flow, a non-GAAP measure the company defines as operating cash flow less purchases of property and equipment and capitalized internal-use software costs, was $19.4 million for the quarter and $79.8 million for the nine months. Cash, cash equivalents, and investments stood at $542.2 million as of October 31, 2024.
Growth in the customer base came almost entirely from larger accounts. Ending ARR rose 10% year over year to $483 million. Customers with annual recurring revenue above $100,000 grew 6% to 825. Total paid customers were 15,050, essentially unchanged from 15,049 a year earlier. Dollar-based net retention rate slipped to 107% from 110%. Remaining performance obligations were $405 million, up 96.6%, and the company expects to recognize about $278 million, or 69%, of that balance over the next 12 months. Deferred revenue rose 10.3% to $216.7 million.
Non-GAAP profitability looked very different from the GAAP result. Non-GAAP operating income was $25.0 million, a 21.0% non-GAAP operating margin, and non-GAAP net income per diluted share was $0.25. Guidance for the fourth quarter of fiscal 2025 calls for year-over-year growth of 7% to 8% and non-GAAP net income per diluted share of $0.15 to $0.16, assuming roughly 93 million diluted shares and a 23% non-GAAP tax rate. For the full fiscal year 2025, the company guides to year-over-year growth of 8% and non-GAAP net income per diluted share of $0.78 to $0.79, up from $0.67 to $0.72.
Through the first nine months of fiscal 2025, revenue was $346.1 million, up 8.3% year over year, and the net loss narrowed 27.8%. The stated risks are the familiar ones for a subscription software vendor: unfavorable industry or global economic conditions, cuts in information technology spending, reliance on a single product, competition, and the ability to attract new customers and retain existing ones. Recent announcements included AI-powered product innovations, recognition as a Leader in the 2024 GigaOm Radar for AIOps, and a Total Economic Impact study citing a 249% return on investment over three years. The company repurchased 5,144,009 shares under its 2024 program, leaving $1.5 million of the $100.0 million authorization available as of October 31, 2024.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $118.9M | $115.9M | +2.6% | $108.7M | +9.4% |
| Gross profit | $98.7M | $95.9M | +2.9% | $89.0M | +10.9% |
| Gross margin | 83.0% | 82.7% | +0.3 pp | 81.9% | +1.1 pp |
| Research & development | $34.3M | $35.1M | -2.3% | $34.3M | -0.0% |
| Sales & marketing | $49.3M | $51.0M | -3.3% | $49.6M | -0.7% |
| General & administrative | $25.4M | $25.8M | -1.5% | $26.0M | -2.0% |
| Total operating expenses | $109.0M | $111.9M | -2.6% | $109.9M | -0.8% |
| Operating income (loss) | -$10.3M | -$16.0M | +35.8% | -$20.8M | +50.6% |
| Operating margin | -8.7% | -13.8% | +5.2 pp | -19.2% | +10.5 pp |
| Net income (loss) | -$6.1M | -$11.2M | +45.2% | -$13.1M | +53.2% |
| Net margin | -5.2% | -9.7% | +4.5 pp | -12.0% | +6.9 pp |
| Diluted EPS | -$0.07 | -$0.14 | +$0.07 | -$0.16 | +$0.09 |
| Customers | 15,049 | 15,146 | -0.6% | 15,265 | -1.4% |
| Net retention rate | 107.0% | 106.0% | +1.0 pp | 110.0% | -3.0 pp |
Risks
Dollar-based net retention rate for all customers declined to 107% for the trailing twelve months ended October 31, 2024, down from 110% for the prior-year period, indicating softer expansion and renewal economics within the existing customer base even as total customers grew only marginally (15,050 versus 15,049) and customers with more than $100.0 thousand in ARR rose to 825 from 778.
MD&A flags continued exposure to worldwide macroeconomic conditions, including global inflation, the rise in interest rates, recession or economic downturn, volatility in foreign currency exchange rates, and bank failures, which could pressure enterprise demand and spending on the PagerDuty Operations Cloud.
Interest expense rose 63.5% for the three months ended October 31, 2024 to $2.4 million and 64.6% for the nine months ended October 31, 2024 to $6.9 million, driven by contractual interest and amortization of debt issuance costs on the 1.50% Convertible Senior Notes due 2028 issued in October 2023, against total debt obligations of $450.0 million.
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 Gross Margin
Non-GAAP Operating Income
Free and Paid Customers
Remaining Performance Obligations
Annual Recurring Revenue
Summary, forecast, risks and KPIs are extracted from PagerDuty, Inc.'s SEC filings for Q3 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.