Aug 27, 2026 earnings call — PD Reliability Platform launch and restructuring
PagerDuty's ARR crossed $500 million, ending the quarter at $501 million.
Revenue $0.1B (est $0.1B) · EPS $0.32 (est $0.31)
Key quotes
"The PD Reliability Platform is the next generation of Operations Cloud, an AI-first integrated platform where blended teams of agents and humans detect, investigate and remediate incidents together."
"Namely, we have pivoted the company to focus relentlessly on just three things: first, building products that our customers love; second, activating go-to-market motions that convert and expand; and third, optimizing every expense that doesn't directly aid to the first two focus areas."
"The reduction impacted approximately 15% of our workforce concentrated in noncustomer-facing roles while focusing on maintaining our quota capacity and product development expertise."
Analyst Q&A 5
Humans in loop vs autonomy
Q (William Kingsley Crane · Canaccord): Analyst asked if keeping humans in the loop is a core long-term plan or driven by customer readiness, and whether PagerDuty can govern or orchestrate third-party agent execution.
A: Management said humans-in-the-loop is a natural, customer-embraced approach today. They noted some fully autonomous solutions exist for simple or repeated cases and expect autonomy to increase over time. They did not directly address governance of third-party agent execution.
"As for ultimately including fully autonomous solutions, we certainly are seeing some of that now on some simple cases or on cases that are often repeated." — John DiLullo (CEO)
Usage pricing adoption and pipeline
Q (Andrew Sherman · TD Cowen): Analyst asked about customer feedback on the usage-based model, how much usage grows for customers on it, and the enterprise deal pipeline for the second half.
A: Management said the usage model lowers the hurdle to try AI capabilities and aligns value with usage, leading customers—especially enterprises—to show rising usage over time. They said momentum is building in the product and they saw a meaningful quarter-on-quarter increase in customers. They also reported net dollar-based retention rose to 98% and gross retention is improving.
"I would also say that the customers that we are seeing, in particular, the enterprises that are adopting it, we do see a nice trend, a nice usage trend as their time with the product continues." — John DiLullo (CEO)
New AI opportunities and seat trends
Q (Sanjit Singh · Morgan Stanley): Analyst asked where PagerDuty should invest, possible adjacencies, and whether seat-count headwinds are past the worst.
A: Management said they see two AI areas: AI to improve PagerDuty and PagerDuty for AI, and they believe PagerDuty for AI is a strong opportunity as agentic, nondeterministic workloads enter production. They listed risks these workloads bring (drift, hallucination, token runaway, PII leakage) and think Ops Cloud usage will reduce seat compression as retention improves.
"We think that's going to create an incredible opportunity for us as these workloads, these agentic nondeterministic workloads start to enter production." — John DiLullo (CEO)
Drivers of new customer adds and expansions
Q (Jonathan Ngo · Truist): Analyst asked what drove the 100,000 customer additions (product-led vs sales) and what products expanded at large accounts like Anthropic.
A: Management said the adds came from a healthy mix of product-led growth and sales-led motions, and that the sales team is gaining confidence quoting usage-based products. On expansions like Anthropic, they declined to share proprietary details but said these expansions show strength in their PagerDuty-for-AI work and involve frontier model customers learning alongside them.
"It wasn't like -- all of them came through the PLG motion or from PD Online or they weren't all graduations." — John DiLullo (CEO)
Sales cycles, competition, and cost savings
Q (Jeff Van Rhee · Craig-Hallum Capital Group): Analyst asked about changes in sales cycles, competition and customer concerns, and then asked about gross savings from the reduction in force and reinvestment plans.
A: Management said competition is present but platform usage and event throughput are growing while idle agents are decreasing, which helped win rates and sped deal closures this quarter. Management did not disclose gross savings from the headcount move but said margins guidance improved (Q2 was 23.7% non-GAAP operating margin and Q3 guidance rose to 26.5%–27.5%) and some savings will be reinvested into product and go-to-market.
"In Q2, we had a 23.7% non-GAAP operating margin." — Eric Prengel (CFO)