Shares in PageDuty Inc. declined more than 2% in late trading today after the application observability platform provider’s forecast for the quarter ahead fell short of expectations.

For its first quarter ended April 30, PagerDuty reported adjusted earnings per share of 24 cents, up from 17 cents per share in the same quarter of the year prior, on revenue of $119.8 million, up 7.8% year-over-year. Those were beats, since analysts had been expecting 19 cents per share and revenue of $119.27 million.

As of the end of the quarter, PageDuty was sitting on annual recurring revenue of $496 million, up 7% year-over-year. Customers with ARR of $100,000 or more were up 5% to 848 and the company had 15,247 paying customers, up from 15,120 in April 2024.

Business highlights in the quarter included PagerDuty’s February release of agentic artificial intelligence that enhances its Operations Cloud platform. The AI offering included Agentic SRE, Operations Analyst, Scheduler and a curated AI Use Case Library, features designed to automate incident response, optimize workflows and drive operational efficiency.

In April, PagerDuty expanded its platform with enhancements aimed at improving incident management and security. New features included Automation on Alerts for preemptive incident mitigation, new incident workflow actions to streamline resolution processes and the addition of a Security Incident Type to bolster cyber incident response.

Other platform improvements announced during the quarter were focused on better user management and service metadata handling. PagerDuty also introduced Intune support for its mobile app, enabling enhanced compliance and security for enterprise environments.

“While purposefully driving our enterprise transformation, PagerDuty delivered revenue at the top of our guidance range and a non-GAAP operating margin exceeding our guidance by 500 basis points,” Chief Executive Jennifer Tejada said in the company’s earnings release. “We are focused on driving value by scaling our enterprise sales and services while advancing the Operations Cloud with powerful AI agents.”

For its fiscal 2026 second quarter, PagerDuty expects adjusted earnings per share of 19 to 20 cents on revenue of $122.5 million to $124.5 million. Analysts had been expecting an outlook of 23 cents and the revenue outlook at the midpoint fell short of an expected $123.8 million.

For the full year, PagerDuty expects adjusted earnings per share of 95 cents to $1 up from a previous forecast of 90 to 95 cents, on revenue of $493 million to $499 million, revised down from a previous forecast of $500 million to $507 million.

Image: PagerDuty