PagerDuty Reports Flat Revenue Growth Amid AI Push

Event summary

  • PagerDuty reported $121.0 million in revenue for Q1 FY2027, a 1.0% year-over-year increase.
  • Annual Recurring Revenue (ARR) remained flat at $496 million year-over-year.
  • Dollar-based net retention rate dropped to 97% from 104% year-over-year.
  • Non-GAAP operating margin was 24.6%, up from 20.3% in the previous year.
  • John DiLullo appointed as CEO, with Jennifer Tejada transitioning to Executive Chair.

The big picture

PagerDuty's Q1 FY2027 results highlight a strategic focus on AI-first operations management, despite flat revenue growth and declining customer retention rates. The company's expanding AI offers and new Operations Cloud usage-based package aim to position it for long-term growth. The leadership transition to John DiLullo as CEO signals a new chapter, with the challenge of sustaining momentum in a competitive market.

What we're watching

AI Integration
How PagerDuty's expanded AI integration ecosystem with partners like Anthropic, Cursor, and LangChain will drive future growth.
Customer Retention
Whether PagerDuty can reverse the declining net retention rate and stabilize its customer base.
Leadership Transition
The impact of John DiLullo's leadership on PagerDuty's strategic direction and operational execution.

Related topics

Revenue