Q2 2025 PagerDuty Inc Earnings Call Transcript
Key Points
- PagerDuty Inc (PD) delivered a solid second quarter with revenue growth within the guidance range of 8% and non-GAAP operating margin 4 points above the range at 17%.
- Annual recurring revenue (ARR) increased by approximately $11 million to $474 million, marking the eighth consecutive record quarter of non-GAAP profitability.
- The enterprise segment showed strong performance with dollar-based net retention at 106% quarter-over-quarter and a 20% growth in accounts with ARR greater than $500,000.
- PagerDuty Inc (PD) signed a record number of multiyear agreements, representing nearly a third of renewal ARR, despite the volatile macro environment.
- New products, including AIOps, automation, CSOps, and premium support, contributed 65% of net new ARR, showcasing the successful transition from product to platform.
- The company experienced increased scrutiny and multiple approval levels when selling into the enterprise segment, which can lengthen sales cycles.
- Revenue guidance for the full fiscal year 2025 was revised down to a range of $463 million to $467 million, representing a growth rate of 7% to 8%, compared to the previously provided range of $471 million to $477 million.
- Total paid customers decreased to 15,044 compared to 15,146 in the year-ago period, with the bulk of the decrease coming from customer departures in the SMB segment.
- The SMB segment remains a headwind to growth with high levels of churn and downgrade, impacting overall customer count and ARR growth.
- Professional services attached to larger deals are experiencing delays, impacting revenue recognition and contributing to the revised guidance.
Go ahead, Tony.
All right. So our apologies again for the delay. We will start with the safe harbor right about now. Good afternoon, and thank you for joining us to discuss PagerDuty's second-quarter fiscal year 2025 results. With me on today's call are Jennifer Tejada, PagerDuty's Chairperson and Chief Executive Officer; and Howard Wilson, our Chief Financial Officer.
Before we begin, let me remind everyone that statements made on this call include forward-looking statements based on the environment as we currently see it, would involve known and unknown risks and uncertainties that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. These forward-looking statements include our growth prospects, future revenue, operating margins, net income, cash balance and total addressable market, among others, and
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