The following is a summary of the PagerDuty, Inc. (PD) Q3 2025 Earnings Call Transcript:
Financial Performance:
PagerDuty reported Q3 2025 revenue of $119 million, up 9% year-over-year.
Annual recurring revenue (ARR) reached $483 million, growing 10% year-over-year.
Non-GAAP operating income was well above guidance, expanding to an operating margin of 21%.Net income per diluted share is projected to increase to between $0.15 and $0.16 in Q4.
Cash from operations was $22 million, translating to 19% of revenue, with $19 million in free cash flow or 16% of revenue.
Business Progress:
Introduced and integrated PagerDuty Advance, a generative AI offering, across the platform to automate triage and expedite incident response.
Rapid adoption of new products like AIOps, Automation, and Customer Service Ops, which contributed to over 40% of the incremental ARR.
Strengthened market position through strategic hires, including a new SVP of Engineering and a Chief Information Security Officer.
Opportunities:
Continued enterprise momentum and strong pipeline build indicate potential for accelerated growth and expansion.
Adoption of multiproduct across the platform by enterprises resulted in nearly 250% return on investment over three years.
Risks:
Large deal conversions experienced deferrals, although these opportunities were not lost, indicating a potential delay in ARR acceleration.
Market competition and evolving customer needs present ongoing risks that require continuous innovation and adaptation.
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