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PagerDuty’s $501 Million ARR Base — Can Enterprise Expansion Restore Momentum?

PagerDuty, Inc. reported second quarter fiscal year 2027 results reflecting modest revenue growth and strategic shifts aimed at long-term operational resilience and profitability. Revenue for the quarter reached $124.4 million, representing a 1% year-over-year increase and surpassing guidance. The company achieved an annual recurring revenue (ARR) milestone exceeding $500 million for the first time, with ARR ending the quarter at $501 million. International revenue accounted for about 30% of total revenue. Non-GAAP gross margin was 85%, while operating margin stood at 24%, above the high end of guidance. On a GAAP basis, PagerDuty reported net income of $4.7 million, marking the fifth consecutive quarter of GAAP profitability. Cash from operations was $37 million, with free cash flow of $33 million, resulting in a 26% free cash flow margin. The company held $470 million in cash and investments at quarter-end and repurchased roughly 800,000 shares for $7.6 million.