SAN FRANCISCO, August 27, 2026, 18:45 EDT — PagerDuty (PD) stock eased 0.2% in after-hours trading after the company announced it will cut its workforce by 15%, a move aimed at raising its profit forecast.
- PagerDuty stock eased 0.2% to $12.60 in after-hours trading, following a 3.6% advance during the regular session.
- Quarterly revenue increased by 0.8%, as the GAAP operating margin expanded by 530 basis points to reach 8.2%.
- The company intends to cut around 15% of its staff and anticipates incurring charges between $5.5 million and $7.5 million.
- PagerDuty increased the midpoint of its full-year adjusted EPS guidance by 4.2% from its earlier projection.
PagerDuty Inc. (NYSE: PD) shares slipped in after-hours trading on Thursday. The incident-management software company reported largely unchanged revenue, expanded margins, and announced it will cut 15% of its staff.
The share price dropped 0.2% to $12.60 during after-hours trading. Earlier, it ended the session up 3.6% at $12.63, increasing its equity value by roughly $34 million.
The subdued response highlights a clear trade-off. Earnings are rising more quickly than revenue growth due to cost controls.
Revenue for the second quarter rose by 0.8% to $124.4 million, surpassing the consensus estimate of about $123.3 million. Adjusted earnings reached $0.32 per share, beating consensus by one cent earnings estimates.
| Q2 FY2027 metric | Result | Year earlier | Change |
|---|---|---|---|
| Revenue | $124.4 million | $123.4 million | +0.8% |
| GAAP operating margin | 8.2% | 2.9% | up 530 basis points |
| Annual recurring revenue | $501 million | $499 million | +0.4% |
| Customers above $100,000 ARR | 884 | 868 | up 1.8% |
| Free cash flow | $32.8 million | $30.2 million | +8.6% |
GAAP operating income rose nearly threefold to $10.2 million. The operating margin improved to 8.2%, up from 2.9% in the previous year. Free cash flow increased to $32.8 million company earnings release.
Annual recurring revenue exceeded $500 million, but dollar-based net retention reached 98%, indicating a modest decline in spending by existing customers during the period tracked.
Chief Executive John DiLullo reported that revenue surpassed guidance and free cash flow hit $33 million. He described the results as encouraging indicators of momentum behind PagerDuty’s strategy.
The restructuring stands out as the most apparent new driver of profit. PagerDuty anticipates incurring charges between $5.5 million and $7.5 million from the workforce reduction, predominantly impacting the second half quarterly filing summary.
Management lifted its adjusted EPS guidance for the fiscal year to a range of $1.33–$1.37, up from the earlier $1.27–$1.32. The midpoint rose by 4.2%.
Revenue guidance saw only a minor adjustment, with the updated range of $491.5 million to $496.5 million increasing the midpoint by just 0.3% compared to the previous projection.
PagerDuty forecasts revenue between $123 million and $125 million for the third quarter. The company anticipates an adjusted operating margin of 26.5% to 27.5%, along with adjusted EPS in the range of $0.34 to $0.36.
The current after-hours price of $12.60 is roughly 18% higher than the average analyst target of $10.64, suggesting limited tolerance for underperformance. The most optimistic target among analysts is $13.50 analyst estimates.
Risks: Revenue acceleration may be restricted by a 98% retention rate paired with modest ARR growth. Restructuring activities may interrupt sales or product operations. After-hours trading takes place on lighter volume.
The upcoming measure will be whether the streamlined cost structure can sustain customer expansion. For now, PagerDuty’s gains in profitability are clearer than any rebound in revenue.
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