PagerDuty, Inc. (NYSE: PD) is a leader in digital operations management, providing a platform that enables customers to streamline their operational workflows at scale. The company, which caters to enterprises seeking efficient operations, recently reported its fourth quarter and full year results for fiscal year 2025.

For the fourth quarter, PagerDuty achieved revenue of $121 million, a 9.3% increase year-over-year. This performance concludes a fiscal year where total revenues reached approximately $467.5 million, reflecting an 8.5% annual growth. Annual recurring revenue (ARR) also saw an increase, growing 9% year-over-year to $494 million.

In terms of profitability, PagerDuty reported a non-GAAP operating income of $22.3 million, resulting in a non-GAAP operating margin of 18.3%, a significant rise from the previous year. The total operating loss of $11.7 million for the quarter represents a narrowing from a loss of $33.4 million in the same quarter of the prior year. Free cash flow for Q4 was reported at $28.6 million, corresponding to a free cash flow margin of 24%, an increase from 17.6% in the same quarter last year.

PagerDuty ended Q4 with 849 customers generating over $100,000 in annual recurring revenue, a 6% growth from the prior year. The company noted that those customers represented 71% of total ARR, which also saw a year-over-year increase of 12%. Total paid customers increased to 15,114, up from 15,039 year-over-year. Gross margins for the quarter were reported at 86%, within the target range of 84%-86%.

Moving forward, PagerDuty provided guidance for the first quarter of fiscal year 2026, forecasting revenue between $118 million and $120 million, implying annual growth of 6% to 8%. For the full fiscal year 2026, the company expects revenues to range between $500 million and $507 million, also indicating 7% to 8% growth. Non-GAAP net income per share for Q1 is projected to be between $0.18 and $0.19, with expectations for the full year ranging from $0.90 to $0.95 per share. The outlook reflects a commitment to operational efficiency and an emphasis on long-term growth, with non-GAAP margins targeted between 19% and 20% for the full year.

As of January 31, 2025, PagerDuty maintained a solid balance sheet with cash, cash equivalents, and investments totaling approximately $571 million. The company also initiated a $150 million share repurchase program, signaling confidence in its growth trajectory and financial health.

The metrics reveal a stable operation amidst a transition to a more enterprise-focused sales strategy, with early indicators showing increased traction in large accounts and a commitment to enhancing customer retention and expansion through innovative platform features.