PagerDuty, Inc 10-Q for FY2027 Q1
PagerDuty, Inc. (PD)
10-Q
2026-05-28
For: 2026-04-30
View Original
Added on
May 29, 2026
About this 10-Q
PagerDuty, Inc filed this 10-Q on May 28, 2026, covering the quarter ended April 30, 2026 (FY2027 Q1).
Headline figures
Quarter ended April 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $120.97M
- up 1.0% from $119.81M a year earlier
- Net income
- $5.28M
- compared with a net loss of $7.16M a year earlier
- Diluted EPS
- $0.13
- compared with -$0.07 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________
FORM 10-Q
_________________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended April 30, 2026
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number: 001-38856
_________________________
_________________________
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
(844 ) 800-3889
(Registrant’s telephone number, including area code)
_________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
x | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
The total number of shares of common stock outstanding as of May 26, 2026, was 77,122,565 .
TABLE OF CONTENTS
| Page | |||||
2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Form 10-Q”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risk and uncertainties. All statements contained in this Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth and trends, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “potentially,” “likely,” “target,” and similar expressions are intended to identify forward-looking statements.
Forward-looking statements contained in this Form 10-Q include, but are not limited to, statements about our expectations regarding:
•trends in key business metrics, including annual recurring revenue (“ARR”), number of customers and dollar-based net retention rate, and non-GAAP financial measures and their usefulness in evaluating our business;
•trends in revenue, cost of revenue, and gross margin;
•impact of an economic downturn or recession, inflation, tariffs and trade wars, or significant market volatility in the global economy on our customers, partners, employees and business;
•trends in operating expenses, including research and development, sales and marketing, and general and administrative expense, and expectations regarding these expenses as a percentage of revenue;
•our existing cash and cash equivalents and cash provided by sales of our products being sufficient to support working capital and capital expenditures for at least the next 12 months and our ability to meet longer-term expected future cash requirements and obligations, through a combination of cash flows from operating activities and available cash and short-term investment balances;
•our ability to attract and retain executives and employees we need to support our operations and growth;
•our ability to effectively identify, acquire, and integrate complementary companies, technologies, and assets, including our ability to successfully integrate artificial intelligence and machine learning in our offerings;
•our ability to service the interest on our convertible notes and repay such notes, to the extent required;
•our efforts to maintain proper and effective internal controls;
•our ability to expand our operations and increase adoption of our platform internationally;
•our ability to stay abreast of new or modified laws and regulations that currently apply or become applicable to our business both in the United States and internationally; and
•other statements regarding our future operations, financial condition, and prospects and business strategies.
Such forward-looking statements are based on our expectations as of the date of this filing and are subject to a number of risks, uncertainties and assumptions, including, but not limited to, risks detailed in the “Risk Factors” section of this Form 10-Q and in our Annual Report on Form 10-K for the year ended January 31, 2026, filed with the SEC on March 12, 2026. Readers are urged to carefully review and consider the various disclosures made in this Form 10-Q and in other documents we file from time to time with the Securities and Exchange Commission (the “SEC”), that disclose risks and uncertainties that may affect our business. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the effect of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Form 10-Q may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should not rely on forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or may not occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. In addition, the forward-looking statements in this Form 10-Q are made as of the date of this filing, and we do not undertake, and expressly disclaim any duty, to update any of these forward-looking statements for any reason after the date of this Form 10-Q or to conform these statements to actual results or revised expectations.
3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PAGERDUTY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
| April 30, 2026 | January 31, 2026 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Investments | |||||||||||
Accounts receivable, net of allowance for credit losses of $ | |||||||||||
| Deferred contract costs, current | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Deferred contract costs, non-current | |||||||||||
| Lease right-of-use assets | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Deferred tax assets | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities, redeemable non-controlling interest, and stockholders’ equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Accrued compensation | |||||||||||
| Deferred revenue, current | |||||||||||
| Lease liabilities, current | |||||||||||
| Total current liabilities | |||||||||||
| Convertible senior notes, net, non-current | |||||||||||
| Deferred revenue, non-current | |||||||||||
| Lease liabilities, non-current | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (Note 10) | |||||||||||
Redeemable non-controlling interest (Note 3) | |||||||||||
| Stockholders' equity | |||||||||||
| Common stock | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Accumulated deficit | ( | ( | |||||||||
| Treasury stock | ( | ||||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities, redeemable non-controlling interest, and stockholders' equity | $ | $ | |||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
4
PAGERDUTY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Revenue | $ | $ | |||||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Income (loss) from operations | ( | ||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Interest expense | ( | ( | |||||||||||||||||||||
| Other (expense) income, net | ( | ||||||||||||||||||||||
| Income (loss) before provision for income taxes | ( | ||||||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||
| Net income (loss) | $ | $ | ( | ||||||||||||||||||||
| Net loss attributable to redeemable non-controlling interest | ( | ( | |||||||||||||||||||||
| Net income (loss) attributable to PagerDuty, Inc. | $ | $ | ( | ||||||||||||||||||||
| Less: Adjustment attributable to redeemable non-controlling interest | ( | ( | |||||||||||||||||||||
| Net income (loss) attributable to PagerDuty, Inc. common stockholders | $ | $ | ( | ||||||||||||||||||||
| Weighted-average shares used in calculating net income (loss) per share: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
| Net income (loss) per share attributable to PagerDuty, Inc. common stockholders | |||||||||||||||||||||||
| Basic | $ | $ | ( | ||||||||||||||||||||
| Diluted | $ | $ | ( | ||||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
5
PAGERDUTY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net income (loss) | $ | $ | ( | ||||||||||||||||||||
| Unrealized (loss) gain on investments | ( | ||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ||||||||||||||||||||||
| Total comprehensive income (loss) | $ | $ | ( | ||||||||||||||||||||
| Less: comprehensive loss attributable to redeemable non-controlling interest | |||||||||||||||||||||||
| Net loss attributable to redeemable non-controlling interest | ( | ( | |||||||||||||||||||||
| Comprehensive loss attributable to redeemable non-controlling interest | ( | ( | |||||||||||||||||||||
| Comprehensive income (loss) attributable to PagerDuty, Inc. | $ | $ | ( | ||||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
6
PAGERDUTY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except share data)
(unaudited)
| Three months ended April 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Treasury Stock | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 31, 2026 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Vesting of restricted stock units and performance stock units, net of employee payroll taxes | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Retirement of treasury stock | ( | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Adjustment to redeemable non-controlling interest | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Net income attributable to PagerDuty, Inc. | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance as of April 30, 2026 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Three months ended April 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Treasury stock | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 31, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Vesting of restricted stock units and performance stock units, net of employee payroll taxes | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Adjustment to redeemable non-controlling interest | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Net loss attributable to PagerDuty, Inc. | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balance as of April 30, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
7
PAGERDUTY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Three months ended April 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) attributable to PagerDuty, Inc. common stockholders | $ | $ | ( | ||||||||
| Net loss and adjustment attributable to redeemable non-controlling interest | ( | ( | |||||||||
| Net income (loss) | ( | ||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Amortization of deferred contract costs | |||||||||||
| Amortization of debt issuance costs | |||||||||||
| Stock-based compensation | |||||||||||
| Non-cash lease expense | |||||||||||
| Deferred income taxes | |||||||||||
| Other | ( | ( | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | |||||||||||
| Deferred contract costs | ( | ( | |||||||||
| Prepaid expenses and other assets | ( | ( | |||||||||
| Accounts payable | ( | ||||||||||
| Accrued expenses and other liabilities | ( | ( | |||||||||
| Accrued compensation | ( | ( | |||||||||
| Deferred revenue | ( | ( | |||||||||
| Lease liabilities | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property and equipment | ( | ( | |||||||||
| Capitalized software costs | ( | ( | |||||||||
| Purchases of available-for-sale investments | ( | ( | |||||||||
| Proceeds from maturities of available-for-sale investments | |||||||||||
| Purchases of non-marketable equity investments | ( | ||||||||||
| Proceeds from liquidation of non-marketable equity investments | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Repurchases of common stock | ( | ||||||||||
| Proceeds from issuance of common stock upon exercise of stock options | |||||||||||
| Employee payroll taxes paid related to net share settlement of restricted stock units | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash | ( | ||||||||||
| Net change in cash, cash equivalents, and restricted cash | ( | ||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | |||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | $ | |||||||||
| Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash in other long-term assets | |||||||||||
| Total cash, cash equivalents, and restricted cash | $ | $ | |||||||||
| Supplemental cash flow data: | |||||||||||
| Cash paid for income taxes | $ | $ | |||||||||
| Cash paid for interest | $ | $ | |||||||||
| Non-cash investing and financing activities: | |||||||||||
| Purchase of property and equipment, accrued but not yet paid | $ | $ | |||||||||
| Stock-based compensation capitalized in software costs | $ | $ | |||||||||
| Bonuses capitalized in software costs | $ | $ | |||||||||
| Excise tax, accrued but not yet paid | $ | $ | |||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
8
PAGERDUTY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1. Description of Business and Basis of Presentation
Description of Business
PagerDuty, Inc. was incorporated under the laws of the state of Delaware in May 2010.
PagerDuty, Inc., together with its wholly-owned subsidiaries and subsidiaries in which PagerDuty, Inc. holds a controlling interest (collectively, the “Company”), provides a digital operations management platform that manages urgent and mission-critical work for a modern, digital business (the “PagerDuty Platform”). The PagerDuty Platform collects data and digital signals from virtually any software-enabled system or device and leverages advanced artificial intelligence and powerful machine learning to correlate, process, predict, and remediate incidents and opportunities in real time. This intelligence powers the Company’s core capabilities in incident management, bringing together the right people with the right context and recommended actions so they can resolve issues in minutes or seconds, from anywhere.
Basis of Presentation
The condensed consolidated financial statements include the results of PagerDuty, Inc., its wholly-owned subsidiaries, and subsidiaries in which the Company holds a controlling interest. All intercompany balances and transactions have been eliminated in consolidation.
In the opinion of management, the information contained herein reflects all adjustments necessary for a fair statement of the Company’s financial position, results of operations and comprehensive income (loss), stockholders’ equity, and cash flows. The results of operations for the three months ended April 30, 2026 are not necessarily indicative of the results to be expected for the full year ending January 31, 2027 or for any other interim period, or for any future year.
The Company’s fiscal year ends on January 31. References to fiscal 2027 refer to the fiscal year ending January 31, 2027.
Reclassification
Certain reclassifications of prior period amounts have been made in the Company’s condensed consolidated statements of cash flows to conform to the current period presentation. The Company has reclassified the change in deferred tax liabilities from the accrued expenses and other liabilities line item to the deferred income taxes line item on the accompanying condensed consolidated statements of cash flows. This reclassification had no effect on the reported net cash provided by operating activities.
9
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make, on an ongoing basis, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. The Company’s most significant estimates and judgments involve the period of benefit for amortizing deferred contract costs, stock-based compensation, redemption value of redeemable non-controlling interests, estimates surrounding the provision for income taxes, deferred tax assets and liabilities, and the valuation allowance recorded against deferred tax assets, and estimates related to the Company’s revenue recognition, such as the assessment of performance obligations in the Company’s revenue arrangements and the fair value assigned to each performance obligation, among others. Management bases its estimates on historical experience and on various other assumptions which management believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
Note 2. Summary of Significant Accounting Policies
Concentrations of Risk and Significant Customers
The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, available-for-sale investments, and accounts receivable. All of the Company’s cash equivalents and investments are invested in money market funds, U.S. Treasury securities, commercial paper, corporate debt securities, or U.S. Government agency securities that management believes to be of high credit quality. The Company’s cash, cash equivalents, and available-for-sale investments are spread across several different financial institutions.
No single customer accounted for 10% or more of the total accounts receivable balance as of April 30, 2026 or January 31, 2026. No single customer accounted for 10% or more of revenue for the three months ended April 30, 2026 or 2025.
Segment Information
Related Party Transactions
Certain members of the Company’s Board of Directors serve as directors of, or are executive officers of, and in some cases are investors in, companies that are customers or vendors of the Company. The Company had no
Significant Accounting Policies
There have been no material changes to the Company’s significant accounting policies from those described in the Company’s Annual Report on Form 10-K.
10
Restricted Cash
Recently Adopted Accounting Standards
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversion of Convertible Debt Instruments. This ASU clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The Company adopted this ASU in the current period. This ASU did not have a material impact on the Company’s financial statements.
Recent Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. In January 2025, the FASB issued ASU No. 2025-01 to clarify the effective date of ASU 2024-03. ASU 2024-03 requires that at each interim and annual reporting period, an entity discloses the amounts of certain expenses included in each relevant expense caption. The newly required expense disclosures include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements. The amendment also requires that an entity discloses a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and discloses the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. This ASU is effective for fiscal years beginning after December 15, 2026. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40). This ASU amends the requirements for commencing capitalization of software costs related to software development projects. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements.
Note 3. Redeemable Non-Controlling Interest
In May 2022, the Company established a joint venture, PagerDuty K.K. The Company obtained a 51 % controlling interest and has consolidated the financial results of the joint venture.
The agreements with the non-controlling interest holders of PagerDuty K.K. contain redemption features whereby the interest held by the non-controlling interest holders is redeemable either: (i) at the option of the non-controlling interest holders; or (ii) at the option of the Company, both beginning on the tenth anniversary of the initial capital contribution. The balance of the redeemable non-controlling interest is reported at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest's share of earnings or losses and other comprehensive income or loss, or its redemption value, which is determined based on a prescribed formula derived from multiple metrics including the annual recurring revenue of PagerDuty K.K. The resulting changes in the estimated redemption amount are recorded with corresponding adjustments against additional paid-in capital due to the absence of retained earnings. The carrying amount of the redeemable non-controlling interest is recorded on the Company's condensed consolidated balance sheets as temporary equity.
11
The following table summarizes the activity in the redeemable non-controlling interest for the periods indicated (in thousands):
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Balance at beginning of period | $ | $ | |||||||||||||||||||||
| Net loss attributable to redeemable non-controlling interest | ( | ( | |||||||||||||||||||||
| Adjustments to redeemable non-controlling interest | ( | ( | |||||||||||||||||||||
| Balance at end of period | $ | $ | |||||||||||||||||||||
Note 4. Cash, Cash Equivalents, and Investments
Cash, cash equivalents, and investments consisted of the following as of the dates indicated (in thousands):
| April 30, 2026 | January 31, 2026 | ||||||||||
| Cash and cash equivalents: | |||||||||||
| Cash | $ | $ | |||||||||
| Money market funds | |||||||||||
| Commercial paper | |||||||||||
| Total cash and cash equivalents | $ | $ | |||||||||
| Available-for-sale investments: | |||||||||||
| U.S. Treasury securities | $ | $ | |||||||||
| Commercial paper | |||||||||||
| Corporate debt securities | |||||||||||
| U.S. Government agency securities | |||||||||||
| Total available-for-sale investments | $ | $ | |||||||||
12
The following tables summarize the amortized cost, net unrealized gains (losses), and fair value of the Company’s investments by significant investment category as of the dates indicated (in thousands). Gross realized gains or losses from sales of available-for-sale securities were not material for the three months ended April 30, 2026 and 2025.
| April 30, 2026 | |||||||||||||||||
| Amortized Cost | Unrealized Gain (Loss), Net | Estimated Fair Value | |||||||||||||||
| Available-for-sale investments: | |||||||||||||||||
| U.S. Treasury securities | $ | $ | ( | $ | |||||||||||||
| Commercial paper | ( | ||||||||||||||||
| Corporate debt securities | ( | ||||||||||||||||
| U.S. Government agency securities | ( | ||||||||||||||||
| Total available-for-sale investments | $ | $ | ( | $ | |||||||||||||
| January 31, 2026 | |||||||||||||||||
| Amortized Cost | Unrealized Gain (Loss), Net | Estimated Fair Value | |||||||||||||||
| Available-for-sale investments: | |||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | ||||||||||||||
| Commercial paper | |||||||||||||||||
| Corporate debt securities | |||||||||||||||||
| U.S. Government agency securities | |||||||||||||||||
| Total available-for-sale investments | $ | $ | $ | ||||||||||||||
The following tables present the Company’s available-for-sale securities by contractual maturity date as of the dates indicated (in thousands):
| April 30, 2026 | |||||||||||
Amortized Cost | Fair Value | ||||||||||
| Due within one year | $ | $ | |||||||||
| Due between one to five years | |||||||||||
| Total | $ | $ | |||||||||
| January 31, 2026 | |||||||||||
Amortized Cost | Fair Value | ||||||||||
| Due within one year | $ | $ | |||||||||
| Due between one to five years | |||||||||||
| Total | $ | $ | |||||||||
13
As of April 30, 2026, there were 89 securities in an unrealized loss position with an aggregate fair value of $146.4 million, none of which were in a continuous unrealized loss position for more than 12 months. As of January 31, 2026, there were 43 securities in an unrealized loss position with an aggregate fair value of $64.6 million, none of which was in a continuous unrealized loss position for more than 12 months.
When evaluating investments for impairment, the Company reviews factors such as the extent to which fair value has been below cost basis, the financial condition of the issuer and any changes thereto, and the Company’s intent to sell, or whether it is more likely than not that the Company will be required to sell, the investment before recovery of the investment’s amortized cost. No impairment loss has been recorded on the securities included in the tables above, as the Company believes that any decrease in fair value of these securities is temporary and the Company expects to recover at least up to the initial cost of the investment for these securities. The Company has not recorded an allowance for credit losses, as the Company believes any such losses would not be material based on the high-grade credit rating for each of its marketable securities as of the end of each period.
Note 5. Fair Value Measurements
The Company measures its financial assets and liabilities at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value, as follows:
Level 1—Valuations based on observable inputs that reflect quoted prices for identical assets or liabilities in active markets.
Level 2—Valuations based on inputs that are directly or indirectly observable in the marketplace.
Level 3—Valuations based on unobservable inputs that are supported by little or no market activity.
The following tables present information about the Company’s financial assets that are required to be measured or disclosed at fair value using the above input categories as of the dates indicated (in thousands):
| As of April 30, 2026 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Money market funds | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Treasury securities | |||||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||
| U.S. Government agency securities | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Included in cash equivalents | $ | ||||||||||||||||||||||
| Included in investments | $ | ||||||||||||||||||||||
| As of January 31, 2026 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Money market funds | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Treasury securities | |||||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||
| U.S. Government agency securities | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Included in cash equivalents | $ | ||||||||||||||||||||||
| Included in investments | $ | ||||||||||||||||||||||
The Company’s assets that are measured by management at fair value on a recurring basis are generally classified within Level 1 or Level 2 of the fair value hierarchy.
14
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of April 30, 2026 and January 31, 2026, the Company’s Level 2 securities are measured at fair value and classified within Level 2 in the fair value hierarchy because the Company uses quoted market prices for similar instruments or nonbinding market prices that are corroborated by observable market data or alternative pricing sources and models using market observable inputs to determine fair value.
The carrying amounts of certain financial instruments, including cash held in banks, accounts receivable, and accounts payable approximate fair value due to their short-term maturities and are excluded from the fair value table above.
Convertible Senior Notes
As of April 30, 2026, the estimated fair value of the Company’s 1.50 % Convertible Senior Notes due 2028 (the “2028 Notes”) was approximately $367.1 million. The fair value was determined based on the quoted price for the 2028 Notes in an inactive market on the last trading day of the reporting period and are considered as Level 2 in the fair value hierarchy.
Note 6. Property and Equipment, Net
Property and equipment, net, consisted of the following as of the dates indicated (in thousands):
| April 30, 2026 | January 31, 2026 | ||||||||||
| Leasehold improvements | $ | $ | |||||||||
| Computers and equipment | |||||||||||
| Furniture and fixtures | |||||||||||
| Capitalized software | |||||||||||
Gross property and equipment(1) | |||||||||||
| Accumulated depreciation and amortization | ( | ( | |||||||||
| Property and equipment, net | $ | $ | |||||||||
(1) Gross property and equipment includes construction-in-progress for capitalized software of $18.3 million and construction-in-progress for leasehold improvements and capitalized software of $15.8 million that had not yet been placed in service as of April 30, 2026 and January 31, 2026, respectively. The costs associated with construction-in-progress are not amortized until the asset is available for its intended use.
Depreciation and amortization expense was $2.1 million and $2.0 million for the three months ended April 30, 2026 and 2025, respectively.
Note 7. Deferred Contract Costs
Deferred contract costs, which primarily consist of deferred sales commissions, were $42.9 million and $43.4 million as of April 30, 2026 and January 31, 2026, respectively. Amortization expense for deferred contract costs was $5.2 million and $5.5 million for the three months ended April 30, 2026 and 2025, respectively. There was no
Note 8. Leases
Operating Leases
The Company has entered into various non-cancellable operating leases for its office spaces with lease periods expiring through fiscal 2033. The operating lease agreements generally provide for rental payments on a graduated basis and for options to renew, which could increase future minimum lease payments if exercised.
Lease right-of-use assets and liabilities are recognized at the lease’s commencement date based on the present value of lease payments over the lease term. As the implicit rate of the Company's leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available on the commencement date to determine the present value of lease payments. The lease right-of-use assets also include any lease payments made and exclude lease incentives such as tenant improvement allowances.
15
The Company’s operating leases typically include non-lease components such as common-area maintenance costs. The Company has elected a practical expedient that allows it to include non-lease components with lease payments for the purpose of calculating lease right-of-use assets and liabilities, to the extent that they are fixed. Non-lease components that are not fixed are expensed as incurred as variable lease payments.
Leases with a term of one year or less are not recognized on the Company’s condensed consolidated balance sheets, but rather are expensed on a straight-line basis over the lease term.
The following table presents information about leases on the condensed consolidated balance sheet as of the dates indicated (in thousands):
| April 30, 2026 | January 31, 2026 | ||||||||||
| Assets: | |||||||||||
| Lease right-of-use assets | $ | $ | |||||||||
| Liabilities: | |||||||||||
| Lease liabilities, current | $ | $ | |||||||||
| Lease liabilities, non-current | $ | $ | |||||||||
As of April 30, 2026 and January 31, 2026, the weighted average remaining lease term was 3.8 years and 3.6 years, respectively. As of April 30, 2026 and January 31, 2026, the weighted average discount rate used to determine the net present value of the lease liabilities was 6.0 % and 5.9 %, respectively.
The following table presents information about leases on the condensed consolidated statement of operations for the periods indicated (in thousands):
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Operating lease expense | $ | $ | |||||||||||||||||||||
| Short-term lease expense | |||||||||||||||||||||||
| Variable lease expense | |||||||||||||||||||||||
The following table presents supplemental cash flow information about the Company’s leases for the periods indicated (in thousands):
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities | $ | $ | |||||||||||||||||||||
Note 9. Debt and Financing Arrangements
2025 Convertible Senior Notes
In June 2020, the Company issued an aggregate principal amount of $287.5 million of convertible senior notes due in 2025 (the “2025 Notes”) in a private offering pursuant to an indenture dated June 25, 2020 (the “2025 Indenture”).
During the year ended January 31, 2026, the Company repaid the 2025 Notes in cash prior to the maturity date of July 1, 2025, which included aggregate principal amount of $57.5 million and accrued interest of $0.4 million.
16
2028 Convertible Senior Notes
In October 2023, the Company issued an aggregate principal amount of $402.5 million of convertible senior notes due in 2028 in a private offering pursuant to an indenture dated October 13, 2023 (the “2028 Indenture” and, together with the 2025 Indenture, the “Indentures”). The total net proceeds from the debt offering, after deducting initial purchasers’ discounts and debt issuance costs of $12.0 million, were $390.4 million.
The 2028 Notes are senior, unsecured obligations of the Company and accrue interest payable semiannually in arrears on April 15 and October 15 of each year, beginning on April 15, 2024, at a rate of 1.50 % per year. The 2028 Notes will mature on October 15, 2028, unless such notes are converted, redeemed or repurchased earlier. Upon conversion, the Company will pay cash up to the aggregate principal amount of the 2028 Notes to be converted and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, in respect to the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the 2028 Notes being converted, in the manner and subject to the terms and conditions provided in the 2028 Indenture.
Accounting for the 2025 Notes and the 2028 Notes
The 2028 Notes are, and the 2025 Notes, prior to their repayment were, accounted for as a single liability measured at their amortized cost, as no other embedded features require bifurcation and recognition as derivatives. As of April 30, 2026, the 2028 Notes are classified as non-current liabilities. Issuance costs are amortized to interest expense over the contractual term of the 2028 Notes at an effective interest rate of 2.13 %.
The net carrying amount of the 2028 Notes was as follows as of the dates indicated (in thousands):
| As of April 30, 2026 | As of January 31, 2026 | ||||||||||
| Principal | $ | $ | |||||||||
| Unamortized issuance costs | ( | ( | |||||||||
| Net carrying amount | $ | $ | |||||||||
Interest expense recognized related to the 2028 Notes and the 2025 Notes was as follows for the periods indicated (in thousands):
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Contractual interest expense | $ | $ | |||||||||||||||||||||
| Amortization of debt issuance costs | |||||||||||||||||||||||
| Total interest expense related to the 2025 Notes and the 2028 Notes | $ | $ | |||||||||||||||||||||
Capped Call Transactions
In connection with the offering of the 2028 Notes, the Company entered into separate privately negotiated capped call transactions (the “2028 Capped Calls”). The 2028 Capped Calls are generally intended to reduce or offset the potential dilution to the common stock upon any conversion of the 2028 Notes, subject to a cap based on the cap price of such 2028 Capped Calls. For accounting purposes, the 2028 Capped Calls are separate transactions, and not part of the terms of the 2028 Notes. The 2028 Capped Calls are recorded in stockholders’ equity and are not accounted for as derivatives. The costs incurred to purchase the 2028 Capped Calls of $55.1 million, were recorded as a reduction to additional paid-in capital in the accompanying condensed consolidated balance sheets. The 2028 Capped Calls will not be remeasured as long as they continue to meet the conditions for equity classification.
During the year ended January 31, 2026, the capped call transactions with certain financial institution counterparties, entered into and in connection with the repayment of the 2025 Notes, expired.
17
The 2028 Capped Calls each have an initial strike price of approximately $27.35 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2028 Notes, and an initial cap price of $42.90 per share, subject to certain adjustments. The 2028 Capped Calls cover, subject to anti-dilution adjustments, approximately 14.7 million shares of the Company’s common stock. The 2028 Capped Calls are subject to automatic exercise over a 60 trading day period commencing on July 20, 2028, subject to earlier termination under certain circumstances and may be settled in cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election. The 2028 Capped Calls remain outstanding as of April 30, 2026.
Note 10. Commitments and Contingencies
Legal Matters
From time to time, the Company may be subject to various claims and other legal matters arising in the ordinary course of business. The Company investigates these claims as they arise and accrues estimates for resolution of legal and other contingencies when losses are probable and estimable. The Company is not currently a party to any material legal proceedings nor is it aware of any pending or threatened litigation that could reasonably be expected to have a material adverse effect on its business, financial condition, results of operations, or cash flows.
Warranties and Indemnification
The Company has entered into service-level agreements with a portion of its customers defining levels of uptime reliability and performance and permitting those customers to receive credits if the Company fails to meet the defined levels of uptime. To date, the Company has not experienced any significant failures to meet defined levels of uptime reliability and performance as a result of those agreements and, as a result, the Company has not incurred or accrued any material liabilities related to these agreements in the financial statements.
In the ordinary course of business, the Company may agree to indemnify customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. As permitted under Delaware law, the Company has entered into indemnification agreements with its directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No demands have been made upon the Company to provide indemnification under such agreements, and there are no claims that the Company is aware of that could have a material effect on its consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income (loss), or consolidated statements of cash flows.
Note 11. Deferred Revenue and Performance Obligations
The following table presents the changes to the Company’s deferred revenue for the periods indicated (in thousands):
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Deferred revenue, beginning of period | $ | $ | |||||||||||||||||||||
| Billings | |||||||||||||||||||||||
| Revenue recognized | ( | ( | |||||||||||||||||||||
| Deferred revenue, end of period | $ | $ | |||||||||||||||||||||
For the three months ended April 30, 2026 and 2025, the majority of revenue recognized was from the deferred revenue balances at the beginning of each period.
The transaction price allocated to the remaining performance obligations represents all future, non-cancelable contracted revenue that has not yet been recognized, inclusive of deferred revenue that has been invoiced and non-cancelable amounts that will be invoiced and recognized as revenue in future periods. The Company estimates its remaining performance obligations at a point in time. Actual amounts and timing of revenue recognition may differ from these estimates largely due to contract renewals and modifications.
18
Note 12. Common Stock and Stockholders’ Equity
Common Stock Repurchases
In March 2025, the Company’s Board of Directors authorized a share repurchase program to repurchase up to $150.0 million of the Company’s common stock (the “2025 Share Repurchase Program”), which was subsequently increased to $200.0 million in August 2025. During the three months ended April 30, 2026, the Company repurchased a total of 8,532,838 shares under the 2025 Share Repurchase Program and subsequently retired 8,896,106 shares. As of April 30, 2026, the 2025 Share Repurchase Program was complete and none of the total amount authorized to be repurchased remained available.
Equity Incentive Plan
In 2019, the Company adopted the 2019 Equity Incentive Plan (the “2019 Plan”). As of April 30, 2026 and January 31, 2026, the Company was authorized to grant up to 44,909,055 shares and 40,659,581 shares of common stock, respectively, under the 2019 Plan.
The Company currently uses authorized and unissued shares to satisfy stock award exercises and settlement of restricted stock units (“RSUs”) and performance stock units (“PSUs”). As of April 30, 2026 and January 31, 2026, there were 26,008,878 shares and 23,024,478 shares, respectively, available for future issuance under the 2019 Plan.
Shares of common stock reserved for future issuance as of the end of the period noted are as follows:
| April 30, 2026 | |||||
| Outstanding stock options and unvested RSUs and PSUs | |||||
| Available for future stock option, RSU, and PSU grants | |||||
| Available for Employee Stock Purchase Plan (“ESPP”) | |||||
| Total common stock reserved for future issuance | |||||
Stock Options
As of April 30, 2026, total unrecognized compensation cost related to unvested stock options granted under the 2019 Plan was immaterial . Such costs will be recognized over a weighted average period of 0.2 years.
Restricted Stock Units
A summary of the Company’s RSU activity and related information is as follows:
| Number of RSUs | Weighted Average Grant Date Fair Value Per Share | ||||||||||
| Outstanding at January 31, 2026 | $ | ||||||||||
| Granted | $ | ||||||||||
| Vested | ( | $ | |||||||||
| Forfeited or canceled | ( | $ | |||||||||
| Outstanding at April 30, 2026 | $ | ||||||||||
The fair value of the Company’s RSUs is expensed ratably over the vesting period, and is based on the fair value of the underlying shares on the date of grant. The Company accounts for forfeitures as they occur.
19
As of April 30, 2026, there was $96.6 million of unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted average period of 2.2 years based on vesting under the award service conditions.
Performance Stock Units
The Company grants PSUs to certain employees of the Company, which, in the current fiscal year, are to vest based on the level of achievement of certain targets related to the Company’s operating plan over the one-year performance period. In prior periods, PSUs vested based on both the level of achievement of certain targets related to the Company’s operating plan and the relative growth of the per share price of the Company’s common stock as compared to the S&P Software & Services Select Index over the one-year performance period. The PSUs vest over a -year period, subject to continuous service with the Company. The number of shares of the Company’s common stock that will vest based on the performance and market conditions can range from 0 % to 200 % of the target amount. Compensation expense for PSUs with performance conditions is measured using the fair value at the date of grant, and may be adjusted over the vesting period based on interim estimates of performance against the performance condition. Compensation expense for PSUs with market conditions is measured using a Monte Carlo simulation approach. Expense is recorded over the vesting period under the graded-vesting attribution method.
During the three months ended April 30, 2026, the Compensation Committee of the Company’s Board of Directors certified the results of the Company’s operating plan for the fiscal year ended January 31, 2026. Based on the results, the PSUs granted in April 2025 (“2025 PSU Awards”) were earned at an attainment of 0 %.
A summary of the Company’s PSU activity and related information is as follows:
| Number of PSUs | Weighted Average Grant Date Fair Value Per Share | ||||||||||
| Outstanding at January 31, 2026 | $ | ||||||||||
Granted(1) | $ | ||||||||||
| Vested | ( | $ | |||||||||
| Forfeited or canceled | ( | $ | |||||||||
| Performance adjustment for 2025 PSU Awards | ( | $ | |||||||||
| Outstanding at April 30, 2026 | $ | ||||||||||
(1) This amount represents awards granted at | |||||||||||
During the three months ended April 30, 2026, the Company recorded stock-based compensation expense for the number of PSUs considered probable of vesting based on the attainment of the performance targets.
As of April 30, 2026, total unrecognized stock-based compensation cost related to PSUs was $1.3 million. This unrecognized stock-based compensation cost is expected to be recognized using the accelerated attribution method over a weighted-average period of approximately 1.2 years.
Employee Stock Purchase Plan
The Company’s ESPP generally provides for 24 -month offering periods beginning June 15 and December 15 of each year, with each offering period consisting of four six-month purchase periods. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85 % of the lesser of: (i) the fair market value of the Company’s stock as of the beginning of the offering period; or (ii) the fair market value of the Company’s stock on the purchase date, as defined in the ESPP.
20
During the three months ended April 30, 2026 and 2025, the Company recognized $1.3 million and $1.0 million, respectively, of stock-based compensation expense related to the ESPP.
During the three months ended April 30, 2026 and 2025, the Company withheld $2.1 million and $2.7 million, respectively, in contributions from employees.
During the three months ended April 30, 2026 and 2025, there were no
Stock-Based Compensation
Stock-based compensation expense included in the Company’s condensed consolidated statements of operations was as follows for the periods indicated (in thousands):
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Cost of revenue | $ | $ | |||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
Total stock-based compensation expense | $ | $ | |||||||||||||||||||||
Note 13. Net Income (Loss) per Share
Net income (loss) used for the purpose of determining basic and diluted net income (loss) per share is determined by taking net income (loss) attributable to PagerDuty, Inc., less the redeemable non-controlling interests redemption value adjustment.
The following table presents the calculation of basic and diluted net income (loss) attributable to PagerDuty, Inc. common stockholders for the periods indicated (in thousands, except number of shares and per share data):
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income (loss) attributable to PagerDuty, Inc. | $ | $ | ( | ||||||||||||||||||||
| Less: Adjustment attributable to redeemable non-controlling interest | ( | ( | |||||||||||||||||||||
| Net income (loss) attributable to PagerDuty, Inc. common stockholders | $ | $ | ( | ||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted-average shares used in calculating net income (loss) per share: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Weighted average effect of potentially dilutive securities: | |||||||||||||||||||||||
| Stock options, RSUs, PSUs, and ESPP obligations | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
| Net income (loss) per share attributable to PagerDuty, Inc. common stockholders | |||||||||||||||||||||||
| Basic | $ | $ | ( | ||||||||||||||||||||
| Diluted | $ | $ | ( | ||||||||||||||||||||
Since the Company was in a loss position for the three months ended April 30, 2025, basic net loss per share and diluted net loss per share are the same, as the inclusion of all potential common stock outstanding would have been anti-dilutive.
21
Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows (in thousands):
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
Shares subject to outstanding common stock awards | |||||||||||||||||||||||
Shares issuable pursuant to the ESPP | |||||||||||||||||||||||
| Total | |||||||||||||||||||||||
As described in Note 9. Debt and Financing Arrangements, upon conversion of the 2028 Notes, the Company will pay cash up to the aggregate principal amount of the 2028 Notes to be converted and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, in respect to the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the 2028 Notes being converted. As of April 30, 2026 and 2025, the conversion options of the 2028 Notes were out of the money and as a result, there were no
Note 14. Income Taxes
The Company's provision for income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period.
The Company's quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income (or loss) relates, changes in how the Company does business, and tax law developments. The Company's estimated effective tax rate for the year differs from the U.S. statutory rate of 21% primarily due to non-deductible stock-based compensation expense, state income taxes, and the income tax benefit from research and development credits.
The Company recorded a provision for income taxes of $5.8 million and $0.8 million for the three months ended April 30, 2026 and 2025, respectively. The income tax provision during the three months ended April 30, 2026 was primarily due to an increase in pre-tax income, as well as tax deficiencies on stock-based compensation arising during the period.
The Company regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, the Company considers both positive and negative evidence in the various jurisdictions in which it operates related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. During the year ended January 31, 2026, the Company achieved cumulative U.S. income, measured as pre-tax income adjusted for permanent book-tax differences. Based on all available positive and negative evidence, including the amount of the Company’s taxable income in recent years which is objective and verifiable, and taking into account anticipated future taxable earnings, the Company concluded that it was more likely than not that its U.S. federal and certain state deferred tax assets will be realizable which resulted in a release in its U.S. valuation allowance, with the exception of certain state deferred tax assets that will not be realized in the future. Furthermore, based on available evidence, the Company believes it is more likely than not that certain non-U.S. deferred tax assets will not be fully realizable in the future. The Company continues to maintain a valuation allowance against such deferred tax assets. The Company will continue to monitor the need for a valuation allowance against its deferred tax assets on a quarterly basis.
22
Note 15. Geographic Information
Revenue by location is generally determined by the billing address of the customer. The following table sets forth revenue by geographic area for the periods indicated (in thousands):
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| United States | $ | $ | |||||||||||||||||||||
| International | |||||||||||||||||||||||
| Total | $ | $ | |||||||||||||||||||||
Other than the United States, no other individual country accounted for 10% or more of revenue for the three months ended April 30, 2026 or 2025.
As of April 30, 2026, 64 % of the Company’s long-lived assets, including property and equipment and right-of-use lease assets, were located in the United States, 13 % were located in Canada, and 12 % were located in Portugal.
Note 16. Subsequent Events
On May 11, 2026, the Company announced that Jennifer Tejada resigned from her position as Chief Executive Officer of the Company. As part of her transition, the Company entered into a transition agreement dated May 11, 2026. On the same date, John DiLullo was appointed to succeed Ms. Tejada as the Company’s new Chief Executive Officer. Ms. Tejada remains Executive Chair of the Company’s board of directors, and will continue to serve as a non-employee member of the Company’s board of directors until the Company’s 2027 annual meeting of stockholders.
In May 2026, the Company’s Board of Directors authorized a share repurchase program for the repurchase of shares of the Company’s common stock, in an aggregate amount of up to $100.0 million (the “2026 Share Repurchase Program”). Share repurchases under the 2026 Share Repurchase Program may be made from time to time through open market purchases, privately negotiated transactions, or other legally permissible means, including pursuant to Rule 10b5-1 trading plans. The 2026 Share Repurchase Program expires in May 2028, unless extended or shortened by the Board of Directors, and does not obligate the Company to acquire a specified number of shares, and may be suspended, modified, or terminated at any time, without prior notice. The number of shares to be repurchased will depend on market conditions and other factors.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the financial condition and results of operations of PagerDuty, Inc. and its wholly-owned subsidiaries, and subsidiaries in which PagerDuty, Inc. holds a controlling interest (“PagerDuty,” “we,” “us” or “our”) should be read in conjunction with our unaudited consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements and related notes in our Annual Report on Form 10-K for the year ended January 31, 2026. You should review the sections titled “Special Note Regarding Forward-Looking Statements” above in this Quarterly Report on Form 10-Q for a discussion of forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, adverse effects on our business and general economic conditions as identified below, and those discussed in the section titled “Risk Factors” included in our Annual Report on Form 10-K and elsewhere in this Quarterly Report on Form 10-Q. The last day of our fiscal year is January 31. Our fiscal quarters end on April 30, July 31, October 31 and January 31. Except as otherwise noted, all references to fiscal 2027 refer to the fiscal year ending January 31, 2027.
Overview and Business Model
PagerDuty, Inc. transforms critical work for modern business by building operational resilience, reducing risk, improving customer experience, and driving operational efficiency across digital operations. As a global leader in digital operations management since 2009, PagerDuty helps enterprises manage the complex web of infrastructure, applications, and systems that power today's digital experiences. The PagerDuty Operations Cloud sits at the center of the enterprise technology stack as a system of intelligence and action, ingesting signals from over 750 integrations—including monitoring, observability, security, customer service, and development tools—to orchestrate the right response across people, machines, and software.
Built for the modern era of artificial intelligence (“AI”), PagerDuty empowers customers to maximize the value of their AI investments through agentic workflows, AI-powered automation, and intelligent orchestration that accelerates incident detection and resolution while enabling teams to focus on innovation rather than firefighting.
In today's environment, every business is fundamentally a digital business. Whether in retail, financial services, healthcare, telecommunications, or supply chain logistics, modern commerce depends on increasingly complex networks of digital infrastructure, cloud services, applications, and distributed teams that operate in an always-on world. This complexity continues to accelerate as organizations adopt AI-driven systems and integrate artificial intelligence across their operations.
Customer expectations have never been higher. Incidents are measured not just in lost revenue but in damaged brand reputation and customer trust. Organizations face mounting pressure to deliver always-on digital experiences, resolve issues proactively before customers are impacted, and innovate rapidly without proportionally increasing operational costs or headcount. The ability to anticipate, orchestrate, and resolve time-sensitive, critical, and unplanned work before it escalates has become a strategic imperative and competitive differentiator.
Since our founding in 2009, PagerDuty has evolved from a single product focused on on-call management for developers into a comprehensive, multi-product operations cloud that spans the entire enterprise. Today, our platform breaks down organizational silos across development, IT operations, security, customer service, and business operations, reaching technical practitioners and executive stakeholders alike.
Over more than a decade, we have built one of the industry's most comprehensive integration ecosystems, with over 750 direct integrations spanning monitoring tools, cloud platforms, collaboration systems, ITSM solutions, and business applications. We also support the Model Context Protocol (“MCP”), enabling seamless integration with AI agents and large language model-powered tools to extend our platform's capabilities into emerging AI workflows. This deep integration fabric allows our customers to gather and correlate digital signals from across their entire technology stack – both modern cloud-native and legacy systems – without the friction of context switching or manual data aggregation.
These same integrations enable powerful workflow automation, connecting technical operations with popular collaboration tools and business applications to drive coordinated responses and accelerate resolution. Our open platform approach and extensive partner ecosystem have become a strategic moat, making PagerDuty increasingly embedded and essential within our customers' operations.
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We generate revenue primarily from cloud-hosted software subscriptions, with additional revenue from term-license arrangements. Our land-and-expand business model drives viral adoption and natural expansion as teams experience value and extend PagerDuty to new users, use cases, and products. During the current fiscal year, we took initial steps to provide customers with more flexible pricing options, including usage-based pricing models that enable customers to seamlessly scale between human responders, agents, and automated solutions, better aligning customer investments to business outcomes rather than headcount and licenses, and supporting our transition from traditional single-year seat-based licensing to multiyear platform usage agreements.
While the PagerDuty platform serves organizations of all sizes, we have strategically focused our go-to-market investments, including our enterprise field sales organization, on serving enterprise customers where we see the greatest opportunity for platform adoption and expansion. Today, nearly half of the Fortune 500 and approximately two-thirds of the Fortune 100 rely on PagerDuty as mission-critical infrastructure. Our enterprise customers represent the majority of our revenue and demonstrate strong retention and expansion characteristics.
Macroeconomic Environment
Our business and financial performance has and may continue to be subject to the effects of worldwide macroeconomic conditions, including, but not limited to, global inflation and heightened interest rates, tariffs and trade wars, existing and new laws and regulations, and economic uncertainty and volatility globally and in the jurisdictions in which we do business.
We will continue to monitor the direct and indirect impacts of these or similar circumstances on our business and financial results. For additional information on the potential impact of macroeconomic conditions on our business, see Part II, Item 1A, Risk Factors.
Key Business Metrics
We review the following key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.
While these metrics are based on what we believe to be a reasonable representation of our customer base for the applicable period of measurement, we rely on a third party to validate legal entities using the best available data at period end, and therefore, these metrics are subject to change as new information becomes available. In addition, we are continually seeking to improve our methodology, which may result in future changes to our key metrics.
Annual Recurring Revenue (“ARR”)
We believe ARR is a key metric to measure our business performance because it is an indication of our ability to maintain and expand our relationships with existing customers and generate new business. We define ARR as the annualized recurring revenue of all active contracts at the end of a reporting period.
ARR was as follows as of the dates indicated (in millions):
| As of April 30, | |||||||||||
| 2026 | 2025 | ||||||||||
ARR | $ | 495.6 | $ | 496.0 | |||||||
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Number of Customers
We believe that the number of customers using our platform, particularly those that have subscription agreements for more than $100.0 thousand in ARR, are indicators of our market penetration, particularly within enterprise accounts, the growth of our business, and our potential future business opportunities. We define a customer as a separate legal entity, such as a company or an educational or government institution, that has an active subscription with us or one of our partners to access our platform. In situations where an organization has multiple subsidiaries or divisions, we treat the parent entity as the customer instead of treating each subsidiary or division as a separate customer. Increasing awareness of our platform and its broad range of capabilities, coupled with the fact that the world is always on and powered by increasingly complex technology, has expanded the diversity of our customer base to include organizations of all sizes across virtually all industries. Over time, enterprise customers have constituted a greater share of our revenue. The total number of paid customers and the number of customers with greater than $100.0 thousand in ARR were as follows as of the dates indicated:
| As of April 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Customers | 15,380 | 15,247 | |||||||||
Customers with greater than $100.0 thousand in ARR | 860 | 848 | |||||||||
Dollar-based Net Retention Rate
We use dollar-based net retention rate to evaluate the long-term value of our customer relationships, since this metric reflects our ability to retain and expand the ARR from our existing paid customers. Our dollar-based net retention rate compares our ARR from the same set of customers across comparable periods.
We calculate dollar-based net retention rate as of a period end by starting with the ARR from the cohort of all paid customers as of 12 months prior to such period end (“Prior Period ARR”). We then calculate the ARR from these same customers as of the current period end (“Current Period ARR”). Current Period ARR includes any expansion and is net of downgrades or churn over the last 12 months but excludes ARR from new customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the dollar-based net retention rate. The dollar-based net retention rate was as follows as of the dates indicated:
| Last 12 months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
Dollar-based net retention rate | 97 | % | 104 | % | |||||||||||||||||||
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Results of Operations
Three months ended April 30, 2026 compared to three months ended April 30, 2025
The following table sets forth our results of operations for the periods indicated and as a percentage of revenue (in thousands, except percentages):
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Revenue | $ | 120,967 | 100.0 | % | $ | 119,805 | 100.0 | % | |||||||||||||||
Cost of revenue(1) | 19,020 | 15.7 | % | 19,184 | 16.0 | % | |||||||||||||||||
| Gross profit | 101,947 | 84.3 | % | 100,621 | 84.0 | % | |||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
Research and development(1) | 29,988 | 24.8 | % | 34,048 | 28.4 | % | |||||||||||||||||
Sales and marketing(1) | 39,610 | 32.7 | % | 50,045 | 41.8 | % | |||||||||||||||||
General and administrative(1) | 23,166 | 19.2 | % | 26,855 | 22.4 | % | |||||||||||||||||
| Total operating expenses | 92,764 | 76.7 | % | 110,948 | 92.6 | % | |||||||||||||||||
| Income (loss) from operations | 9,183 | 7.6 | % | (10,327) | (8.6) | % | |||||||||||||||||
| Interest income | 3,926 | 3.2 | % | 6,011 | 5.0 | % | |||||||||||||||||
| Interest expense | (2,107) | (1.7) | % | (2,364) | (2.0) | % | |||||||||||||||||
| Other income (expense), net | (71) | (0.1) | % | 114 | 0.1 | % | |||||||||||||||||
| Income (loss) before provision for income taxes | 10,931 | 9.0 | % | (6,566) | (5.5) | % | |||||||||||||||||
| Provision for income taxes | 5,801 | 4.8 | % | 813 | 0.7 | % | |||||||||||||||||
| Net income (loss) | $ | 5,130 | 4.2 | % | $ | (7,379) | (6.2) | % | |||||||||||||||
| Net loss attributable to redeemable non-controlling interest | (153) | (0.1) | % | (217) | (0.2) | % | |||||||||||||||||
| Net income (loss) attributable to PagerDuty, Inc. | $ | 5,283 | 4.4 | % | $ | (7,162) | (6.0) | % | |||||||||||||||
| Less: Adjustment attributable to redeemable non-controlling interest | (4,963) | (4.1) | % | (665) | (0.6) | % | |||||||||||||||||
| Net income (loss) attributable to PagerDuty, Inc. common stockholders | $ | 10,246 | 8.5 | % | $ | (6,497) | (5.4) | % | |||||||||||||||
______________
(1) Includes stock-based compensation expense as follows (in thousands):
| Three months ended April 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cost of revenue | $ | 849 | $ | 1,097 | |||||||
| Research and development | 6,137 | 9,840 | |||||||||
| Sales and marketing | 4,184 | 6,219 | |||||||||
| General and administrative | 6,793 | 8,597 | |||||||||
| Total | $ | 17,963 | $ | 25,753 | |||||||
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Revenue
We generate revenue primarily from cloud-hosted software subscription fees. We also generate revenue from term-license software subscription fees. Our subscriptions are typically one year in duration but can range from monthly to multi-year. Subscription fees are driven primarily by the number of customers, the number of users per customer, and the level of subscription purchased. We generally invoice customers in advance in annual installments for subscriptions to our software. Revenue related to our cloud-hosted software subscriptions is recognized ratably over the related contractual term beginning on the date that our platform is made available to a customer. For our term-license software subscriptions, we recognize license revenue upon delivery, and software maintenance revenue ratably, typically beginning on the start of the contractual term of the arrangement.
Due to the low complexity of implementation and integration of our platform with our customers’ existing infrastructure, revenue from professional services has not been material to date.
The following sets forth our revenue for the periods indicated (in thousands, except percentages):
| Three months ended April 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Revenue | $ | 120,967 | $ | 119,805 | $ | 1,162 | 1.0 | % | |||||||||||||||
Revenue increased primarily due to growth from new and existing customers. The growth from existing customers was primarily driven by upsell of additional products and services.
Cost of Revenue and Gross Margin
Cost of revenue primarily consists of expenses related to providing our platform to customers, including personnel expenses for operations and global support, payments to our third-party cloud infrastructure providers for hosting our software, payment processing fees, amortization of capitalized software costs, amortization of acquired developed technology and intangible assets, and allocated overhead costs for facilities, information technology, and other allocated overhead costs. We will continue to invest additional resources in our platform infrastructure and our customer support and success organizations to expand the capability of our platform and ensure that our customers are realizing the full benefit of our offerings. The level and timing of investment in these areas could affect our cost of revenue in the future.
Gross profit represents revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Our gross margin may fluctuate from period to period as our revenue fluctuates, and as a result of the timing and amount of investments to expand the capacity of our third-party cloud infrastructure providers and our continued efforts to enhance our platform support and customer success teams.
The following sets forth our cost of revenue and gross margin for the periods indicated (in thousands, except percentages):
| Three months ended April 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Cost of revenue | $ | 19,020 | $ | 19,184 | $ | (164) | (0.9) | % | |||||||||||||||
| Gross margin | 84.3 | % | 84.0 | % | |||||||||||||||||||
The decrease in cost of revenue is primarily due to: (i) a decrease of $1.0 million in amortization of acquired intangible assets; (ii) a decrease of $0.6 million in outside services spend for the customer service team; (iii) a decrease of $0.4 million in merchant fees; and (iv) a decrease of $0.1 million in training and travel-related costs; offset by (v) an increase of $1.2 million in hosting, software, and telecom costs; (vi) an increase of $0.4 million in personnel costs, primarily related to increases in commissions and bonuses; (vii) an increase of $0.3 million in costs to support the business and related infrastructure, which include allocated overhead costs; and (viii) an increase of $0.1 million in amortization of capitalized software.
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Operating Expenses
Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. Personnel expenses are the most significant component of operating expenses and consist of salaries, benefits, bonuses, stock-based compensation expense, and sales commissions. Operating expenses also include amortization of acquired intangible assets, acquisition-related expenses, allocated overhead costs for facilities, shared IT related expenses, including depreciation expense, and certain company-wide events and functions.
The following table sets forth our operating expenses for the periods indicated (in thousands, except percentages):
| Three months ended April 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
Research and development | $ | 29,988 | $ | 34,048 | $ | (4,060) | (11.9) | % | |||||||||||||||
Sales and marketing | 39,610 | 50,045 | (10,435) | (20.9) | % | ||||||||||||||||||
General and administrative | 23,166 | 26,855 | (3,689) | (13.7) | % | ||||||||||||||||||
| Total operating expenses | $ | 92,764 | $ | 110,948 | $ | (18,184) | (16.4) | % | |||||||||||||||
Research and development: Research and development expenses consist primarily of personnel costs for our engineering, product, and design teams. Additionally, research and development expenses include outside services, depreciation of equipment used in research and development activities, acquisition-related expenses, impairment of capitalized software costs, and allocated overhead costs. We expect that our recurring research and development expenses will increase in dollar value as our business grows.
Research and development expenses decreased primarily due to: (i) a decrease of $5.4 million in personnel costs primarily as a result of a decrease in stock-based compensation; offset by (ii) an increase of $1.1 million in costs to support the business and related infrastructure, which include allocated overhead costs; and (iii) an increase of $0.4 million in outside services spend.
Sales and marketing: Sales and marketing expenses consist primarily of personnel costs, costs of outside services, costs of general marketing and promotional activities, training and travel-related expenses, amortization of acquired intangible assets, allocated overhead costs, and credit loss expense. Sales commissions earned by our sales force that are considered incremental and recoverable costs of obtaining a subscription with a customer are deferred and amortized on a straight-line basis over the expected period of benefit, which we have determined to be four years. We expect that our recurring sales and marketing expenses will generally increase in dollar value and continue to be our largest operating expense for the foreseeable future as we expand our sales and marketing efforts.
Sales and marketing expenses decreased primarily due to: (i) a decrease of $6.9 million in personnel costs, driven largely by a decrease in headcount and a decrease in stock-based compensation; (ii) a decrease of $1.2 million in training and travel-related costs; (iii) a decrease of $1.0 million in marketing costs for media campaigns; (iv) a decrease of $0.5 million in costs to support the business and related infrastructure, which include allocated overhead costs; and (v) a decrease of $0.5 million in credit loss expense.
General and administrative: General and administrative expenses consist primarily of personnel costs, training and travel-related costs, and outside services fees for finance, legal, human resources, information technology, and other administrative functions. In addition, general and administrative expenses include non-personnel costs, such as legal, accounting, and other professional fees, hardware and software costs, certain tax, license and insurance-related expenses, acquisition-related expenses, and allocated overhead costs. We expect that our recurring general and administrative expenses will increase in dollar value as our business grows. However, we expect that our general and administrative expenses will decrease as a percentage of our revenue over the longer term, as we expect our investments to allow for improved efficiency for future growth in the business.
General and administrative expenses decreased primarily due to: (i) a decrease of $1.9 million in personnel costs, driven largely by a decrease in headcount and a decrease in stock-based compensation; (ii) a decrease of $1.8 million in outside services spend for consulting services; and (iii) a decrease of $0.2 million in insurance, business taxes, and licenses costs; offset by (iv) an increase of $0.2 million in costs to support the business and related infrastructure, which include allocated overhead costs.
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Non-Operating Income (Expense)
The following table sets forth our non-operating income (expense) for the periods indicated (in thousands, except percentages):
| Three months ended April 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Interest income | $ | 3,926 | $ | 6,011 | $ | (2,085) | (34.7) | % | |||||||||||||||
| Interest expense | $ | (2,107) | $ | (2,364) | $ | 257 | (10.9) | % | |||||||||||||||
| Other (expense) income, net | $ | (71) | $ | 114 | $ | (185) | (162.3) | % | |||||||||||||||
| Provision for income taxes | $ | 5,801 | $ | 813 | $ | 4,988 | 613.5 | % | |||||||||||||||
Interest income: Interest income consists of accretion income and amortization expense on our available-for-sale investments, income earned on our cash and cash equivalents, and interest earned on our short-term investments which consist of U.S. Treasury securities, commercial paper, corporate debt securities, and U.S. Government agency securities.
Interest income decreased primarily due to a decrease in interest rates year-over-year.
Interest expense: Interest expense consists primarily of contractual interest expense and amortization of debt issuance costs on our 1.25% Convertible senior notes due 2025 (the “2025 Notes”) that were repaid during the year ended January 31, 2026 and the contractual interest expense and amortization of debt issuance costs on our 1.50% Convertible Senior Notes due 2028 (the “2028 Notes”) that were issued in October 2023.
Interest expense decreased primarily due to a decrease in interest expense related to our convertible notes, driven by the repayment of the 2025 Notes during the year ended January 31, 2026 .
Other (expense) income, net: Other (expense) income, net primarily consists of foreign currency transaction gains and losses.
The change in other (expense) income, net was due to fluctuations in foreign currency during the period.
Provision for income taxes: Provision for income taxes consists primarily of income taxes in certain foreign and U.S. jurisdictions in which we conduct business.
The change in provision for income taxes is primarily attributable to an increase in pre-tax income, as well as tax deficiencies from stock-based compensation.
We regularly assess the need for a valuation allowance against our deferred tax assets. In making that assessment, we consider both positive and negative evidence in the various jurisdictions in which we operate related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. During the year ended January 31, 2026, we achieved cumulative U.S. income, measured as pre-tax income adjusted for permanent book-tax differences. Based on all available positive and negative evidence, including the amount of our taxable income in recent years which is objective and verifiable, and taking into account anticipated future taxable earnings, we concluded that it was more likely than not that our U.S. federal and certain state deferred tax assets will be realizable, which resulted in a release of our U.S. valuation allowance, with the exception of certain state deferred tax assets that will not be realized in the future. Furthermore, based on available evidence, we believe it is more likely than not that certain non-U.S. deferred tax assets will not be fully realizable in the future. We continue to maintain a valuation allowance against such deferred tax assets. We will continue to monitor the need for a valuation allowance against our deferred tax assets on a quarterly basis.
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Non-GAAP Financial Measures
In addition to our results determined in accordance with United States generally accepted accounting principles (“U.S. GAAP” or “GAAP”), we believe the following non-GAAP financial measures are useful in evaluating our operating performance. We use the below referenced non-GAAP financial information, collectively, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their U.S. GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with U.S. GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by U.S. GAAP to be recorded in our financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by our management about which expenses are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S. GAAP.
Specifically, we exclude the following from historical and prospective non-GAAP financial measures, as applicable:
Stock-based compensation: PagerDuty utilizes stock-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of its stockholders and at long-term retention, rather than to address operational performance for any particular period. As a result, stock-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.
Employer taxes related to employee stock transactions: PagerDuty views the amount of employer taxes related to its employee stock transactions as an expense that is dependent on its stock price, employee exercise and other award disposition activity, and other factors that are beyond PagerDuty’s control. As a result, employer taxes related to employee stock transactions vary for reasons that are generally unrelated to financial and operational performance in any particular period.
Amortization of acquired intangible assets: PagerDuty views amortization of acquired intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of purchased intangibles is an expense that is not typically affected by operations during any particular period.
Acquisition-related expenses: PagerDuty views acquisition-related expenses, such as transaction costs, acquisition-related retention payments, and acquisition-related asset impairment, as events that are not necessarily reflective of operational performance during a period. In particular, PagerDuty believes the consideration of measures that exclude such expenses can assist in the comparison of operational performance in different periods which may or may not include such expenses.
Amortization of debt issuance costs: The imputed interest rates of the Company's convertible senior notes (the "2025 Notes" and the "2028 Notes" or, collectively, the "Notes") was approximately 1.91% for the 2025 Notes and 2.13% for the 2028 Notes. This is a result of the debt issuance costs, which reduce the carrying value of the convertible debt instruments. The debt issuance costs are amortized as interest expense. The expense for the amortization of the debt issuance costs is a non-cash item, and we believe the exclusion of this interest expense will provide for a more useful comparison of our operational performance in different periods.
Restructuring costs: PagerDuty views restructuring costs, such as employee severance-related costs, as events that are not necessarily reflective of operational performance during a period. In particular, PagerDuty believes the consideration of measures that exclude such expenses can assist in the comparison of operational performance in different periods which may or may not include such expenses.
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Shareholder matters: PagerDuty views certain charges, including third-party legal, consulting, and advisory fees, related to shareholder activity that are outside of the ordinary course of our business and expenses related to a cooperation agreement as events that are not necessarily reflective of operational performance during a period. PagerDuty believes that such charges do not have a direct correlation to the operations of the Company’s business and may vary in size depending on the timing, results, and resolution of such shareholder matters. The consideration of measures that exclude such expenses can assist in the comparison of operational performance in periods which may or may not include such expenses.
Adjustment attributable to redeemable non-controlling interest: PagerDuty adjusts the value of redeemable non-controlling interest of its joint venture PagerDuty K.K. according to the operating agreement. PagerDuty believes this adjustment is not reflective of operational performance during a period and exclusion of such adjustments can assist in comparison of operational performance in different periods.
Income tax effects and adjustments: Based on PagerDuty’s financial outlook for fiscal 2027, PagerDuty is utilizing a projected non-GAAP tax rate of 20%. For fiscal 2026, PagerDuty used a projected non-GAAP tax rate of 22%. PagerDuty uses a projected non-GAAP tax rate in order to provide better consistency across the interim reporting periods by eliminating the impact of non-recurring and period specific items, which can vary in size and frequency. PagerDuty's estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that PagerDuty believes materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenue and expenses and other significant events.
Non-GAAP gross profit and non-GAAP gross margin
We define non-GAAP gross profit as gross profit excluding the following expenses typically included in cost of revenue: stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, and restructuring costs. We define non-GAAP gross margin as non-GAAP gross profit as a percentage of revenue.
The following table presents the calculation of non-GAAP gross profit and non-GAAP gross margin for the periods indicated (in thousands):
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Gross profit | $ | 101,947 | $ | 100,621 | |||||||||||||||||||
| Add: | |||||||||||||||||||||||
| Stock-based compensation | 849 | 1,097 | |||||||||||||||||||||
| Employer taxes related to employee stock transactions | 11 | 38 | |||||||||||||||||||||
| Amortization of acquired intangible assets | 320 | 1,273 | |||||||||||||||||||||
| Restructuring costs | 332 | — | |||||||||||||||||||||
| Non-GAAP gross profit | $ | 103,459 | $ | 103,029 | |||||||||||||||||||
| Revenue | $ | 120,967 | $ | 119,805 | |||||||||||||||||||
| Gross margin | 84.3 | % | 84.0 | % | |||||||||||||||||||
| Non-GAAP gross margin | 85.5 | % | 86.0 | % | |||||||||||||||||||
Non-GAAP operating income and non-GAAP operating margin
We define non-GAAP operating income as income (loss) from operations excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, acquisition-related expenses, restructuring costs, and shareholder matters, which are not necessarily reflective of operational performance during a given period. We define non-GAAP operating margin as non-GAAP operating income as a percentage of revenue.
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The following table presents the calculation of non-GAAP operating income and non-GAAP operating margin for the periods indicated (in thousands):
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Income (loss) from operations | $ | 9,183 | $ | (10,327) | |||||||||||||||||||
| Add: | |||||||||||||||||||||||
| Stock-based compensation | 17,963 | 25,753 | |||||||||||||||||||||
| Employer taxes related to employee stock transactions | 226 | 718 | |||||||||||||||||||||
| Amortization of acquired intangible assets | 940 | 1,906 | |||||||||||||||||||||
| Acquisition-related expenses | — | 228 | |||||||||||||||||||||
| Restructuring costs | 1,431 | 3,811 | |||||||||||||||||||||
| Shareholder matters | — | 2,270 | |||||||||||||||||||||
| Non-GAAP operating income | $ | 29,743 | $ | 24,359 | |||||||||||||||||||
| Revenue | $ | 120,967 | $ | 119,805 | |||||||||||||||||||
| Operating margin | 7.6 | % | (8.6) | % | |||||||||||||||||||
| Non-GAAP operating margin | 24.6 | % | 20.3 | % | |||||||||||||||||||
Non-GAAP net income attributable to PagerDuty, Inc. common stockholders
We define non-GAAP net income attributable to PagerDuty, Inc. common stockholders as net income (loss) attributable to PagerDuty, Inc. common stockholders excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of debt issuance costs, amortization of acquired intangible assets, acquisition-related expenses, restructuring costs, shareholder matters, adjustment attributable to redeemable non-controlling interest, and income tax effects and adjustments, which are not necessarily reflective of operational performance during a given period.
The following table presents the calculation of non-GAAP net income attributable to PagerDuty, Inc. common stockholders for the periods indicated (in thousands):
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net income (loss) attributable to PagerDuty, Inc. common stockholders | $ | 10,246 | $ | (6,497) | |||||||||||||||||||
| Add: | |||||||||||||||||||||||
| Stock-based compensation | 17,963 | 25,753 | |||||||||||||||||||||
| Employer taxes related to employee stock transactions | 226 | 718 | |||||||||||||||||||||
| Amortization of debt issuance costs | 595 | 677 | |||||||||||||||||||||
| Amortization of acquired intangible assets | 940 | 1,906 | |||||||||||||||||||||
| Acquisition-related expenses | — | 228 | |||||||||||||||||||||
| Restructuring costs | 1,431 | 3,811 | |||||||||||||||||||||
| Shareholder matters | — | 2,270 | |||||||||||||||||||||
| Adjustment attributable to redeemable non-controlling interest | (4,963) | (665) | |||||||||||||||||||||
| Income tax effects and adjustments | (616) | (5,522) | |||||||||||||||||||||
| Non-GAAP net income attributable to PagerDuty, Inc. common stockholders | $ | 25,822 | $ | 22,679 | |||||||||||||||||||
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Free cash flow
We define free cash flow as net cash provided by operating activities, less cash used for purchases of property and equipment and capitalization of software costs. In addition to the reasons stated above, we believe that free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash in excess of our capital investments in property and equipment in order to enhance the strength of our balance sheet and further invest in our business and potential strategic initiatives. A limitation of the utility of free cash flow as a measure of our liquidity is that it does not represent the total increase or decrease in our cash balance for the period. We use free cash flow in conjunction with traditional U.S. GAAP measures as part of our overall assessment of our liquidity, including the preparation of our annual operating budget and quarterly forecasts and to evaluate the effectiveness of our business strategies. There are a number of limitations related to the use of free cash flow as compared to net cash provided by operating activities, including that free cash flow includes capital expenditures, the benefits of which are realized in periods subsequent to those when expenditures are made.
The following table presents the calculation of free cash flow for the periods indicated (in thousands):
| Three months ended April 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net cash provided by operating activities | $ | 44,283 | $ | 30,670 | |||||||||||||||||||
| Purchases of property and equipment | (965) | (441) | |||||||||||||||||||||
| Capitalization of software costs | (2,126) | (1,243) | |||||||||||||||||||||
| Free cash flow | $ | 41,192 | $ | 28,986 | |||||||||||||||||||
| Net cash used in investing activities | $ | (5,073) | $ | (1,682) | |||||||||||||||||||
| Net cash used in financing activities | $ | (67,608) | $ | (3,955) | |||||||||||||||||||
Liquidity and Capital Resources
Sources and Uses of Liquidity
As of April 30, 2026, our principal sources of liquidity were cash and cash equivalents and investments totaling $444.0 million. We believe that our existing cash and cash equivalents, investments, and net cash generated from our operating activities will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. Since inception, we have financed operations primarily through sales of our cloud-hosted software subscriptions, net proceeds received from sales of equity securities, and the issuance of our 2028 Notes. We believe we will meet long-term expected future cash requirements and obligations through a combination of cash flows from operating activities and available cash and short-term investment balances.
Debt and Financing Arrangements
Refer to Note 9. Debt and Financing Arrangements, in the notes to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for discussion of our debt arrangements, including the timing of expected maturity of such arrangements. The $57.5 million principal of our 2025 Notes was repaid by us in cash at maturity during the year ended January 31, 2026.
Deferred Revenue
A significant majority of our customers pay in advance for our cloud-hosted and term-license software subscriptions. Therefore, a substantial source of our cash is from our deferred revenue, which is included in the liabilities section of our condensed consolidated balance sheet. Deferred revenue consists of the unearned portion of customer billings, which is recognized as revenue in accordance with our revenue recognition policy. As of April 30, 2026, we had deferred revenue of $243.4 million, of which $240.6 million was recorded as a current liability and expected to be recorded as revenue in the next 12 months, provided all other revenue recognition criteria are met.
34
Share Repurchase Programs
In March 2025, we announced that our Board of Directors approved a share repurchase program (the “2025 Share Repurchase Program”) for the repurchase of shares of our common stock in an aggregate amount of up to $150.0 million. In August 2025, our Board of Directors approved an additional $50.0 million under the 2025 Share Repurchase Program, thus allowing for the repurchase of shares of the Company’s common stock in an aggregate amount of up to $200.0 million. No other changes were made to the program. The 2025 Share Repurchase Program did not obligate us to acquire a specified number of shares, and could be suspended, modified, or terminated at any time, without prior notice. During the three months ended April 30, 2026, we repurchased 8,532,838 shares of common stock through open market purchases at an average per share price of $7.40, completing the 2025 Share Repurchase Program, and retired 8,896,106 shares, which includes 363,268 which remained on the consolidated balance sheet as of January 31, 2026. Under the 2025 Share Repurchase Program, we repurchased a total of 18,606,569 shares of common stock through open market purchases at an average per share price of $10.75 for a total repurchase price of $200.0 million. As of April 30, 2026, all repurchased shares have been retired.
Future Contractual Obligations
Our estimated future obligations as of April 30, 2026 include both current and long-term obligations. Our debt obligations total $396.3 million, all of which is long-term. Additionally, we had $1.0 million of irrevocable standby letters of credit outstanding which were fully collateralized by our restricted cash, all of which represents a long-term cash obligation. Under our operating leases, we had a current obligation of $5.2 million and a long-term obligation of $11.2 million. Operating lease obligations primarily represent the initial contracted term for leases that have commenced as of April 30, 2026, not including any future optional renewal periods.
Effect of Exchange Rates
Our changes in cash can be impacted by the effect of fluctuating exchange rates. Foreign exchange had a negative effect on cash in the three months ended April 30, 2026, decreasing our total cash balance by $0.1 million as of April 30, 2026 and a positive effect on cash in the three months ended April 30, 2025, increasing our total cash balance by $0.3 million as of April 30, 2025.
Cash Flow Information
The following table sets forth our cash flows for the periods indicated (in thousands):
| Three months ended April 30, | |||||||||||||||||
| 2026 | 2025 | $ Change | |||||||||||||||
| Net cash provided by operating activities | $ | 44,283 | $ | 30,670 | $ | 13,613 | |||||||||||
| Net cash used in investing activities | (5,073) | (1,682) | (3,391) | ||||||||||||||
| Net cash used in financing activities | (67,608) | (3,955) | (63,653) | ||||||||||||||
| Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash | (124) | 335 | (459) | ||||||||||||||
| Net change in cash, cash equivalents, and restricted cash | $ | (28,522) | $ | 25,368 | $ | (53,890) | |||||||||||
Operating Activities
Net cash provided by operating activities improved, primarily due to improvements in our operating income (loss) performance due to the 1.0% increase in revenue, along with a 16.4% decrease in operating expenses. Cash provided by operating activities is subject to variability period-over-period as a result of timing differences, including with respect to the collection of receivables and payments of accounts payable, and other items.
Investing Activities
Net cash used in investing activities increased, primarily due to a decrease in proceeds from maturities of available-for-sale investments, offset by an increase in purchases of available-for-sale investments.
35
Financing Activities
Net cash used in financing activities increased, primarily due to an increase in repurchases of common stock, a decrease in proceeds of issuance from common stock upon exercise of stock options, and a decrease in employee payroll taxes related to the net share settlement of restricted stock units.
Off-Balance Sheet Arrangements
Indemnification Agreements
See Note 10. Commitments and Contingencies, in the notes to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for a description of our indemnification agreements.
Letters of Credit
We had $1.0 million of irrevocable standby letters of credit outstanding as of April 30, 2026. Letters of credit are primarily used as a form of security deposits for the spaces we lease.
Critical Accounting Estimates
For a description of our critical accounting estimates, refer to Part II, Item 7, Critical Accounting Estimates in our Annual Report on Form 10-K for the year ended January 31, 2026. There have been no material changes to our critical accounting estimates since our Annual Report on Form 10-K for the year ended January 31, 2026 .
Recent Accounting Pronouncements
See Note 2. Summary of Significant Accounting Policies, in the notes to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for a description of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
There have been no material changes in our market risk from the information provided in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in our Annual Report on Form 10-K for the year ended January 31, 2026.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management, with the participation and supervision of our chief executive officer and our chief financial officer, have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our chief executive officer and chief financial officer have concluded that as of such date, our disclosure controls and procedures were, in design and operation, effective at a reasonable assurance level.
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Limitations on the Effectiveness of Controls
The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.
Changes in Internal Controls Over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended April 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we are involved in various legal proceedings arising from the normal course of business activities. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows, or financial condition.
Item 1A. Risk Factors
Our business involves significant risks, some of which are described below. You should carefully consider the following risks, together with all of the other information in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Any of the following risks could have an adverse effect on our business, results of operations, financial condition or prospects, and could cause the trading price of our common stock to decline. Our business, results of operations, financial condition or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material.
Other than the risk factors below, there have been no material changes from the risk factors described in Part I. Item 1A., “Risk Factors” in our Annual Report on Form 10-K for year ended January 31, 2026:
If we lose key members of our management team or are unable to attract and retain executives and employees we need to support our operations and growth, our business may be harmed.
Our success and future growth depend upon the continued services of our management team and other key employees. From time to time, there may be changes in our management team resulting from the hiring or departure of executives and key employees, which could disrupt our business. Our senior management and key employees are employed on an at-will basis. We currently do not have “key person” insurance on any of our employees. Certain of our key employees have been with us for a long period of time and have fully vested stock options or other long-term equity incentives that may become valuable and may be sold in the public markets, generating significant proceeds, which may reduce their motivation to continue to work for us. The loss of one or more of our senior management, or other key employees could harm our business, and we may not be able to find adequate replacements. In May 2026, we announced the succession of our Chief Executive Officer, Jennifer Tejada, and the appointment of a new Chief Executive Officer, John DiLullo. Additionally, in November 2025, we announced the planned retirement of Howard Wilson, our Chief Financial Officer, and are conducting a search for a successor. While we are taking steps to ensure orderly leadership transitions, any disruption during this process, difficulty attracting a qualified replacement for our Chief Financial Officer, or loss of institutional knowledge could adversely affect our financial operations, internal controls, strategic planning, and investor confidence. Further, such changes may create uncertainty or present challenges related to continuity of our business, preservation of our culture, and our ability to attract and retain highly qualified personnel. We cannot ensure that we will be able to retain the services of any members of our senior management or other key employees, and we cannot ensure that we would be able to timely replace members of our senior management or other key employees should any of them depart.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
Unregistered Sales of Equity Securities
None.
Use of Proceeds
None.
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Issuer Purchases of Equity Securities
The following table presents information with respect to our repurchases of common stock during the three months ended April 30, 2026:
Period | Total number of shares purchased(1) | Average price paid per share(2) | Total number of shares purchased as part of publicly announced program(1) | Approximate dollar value of shares that may yet be purchased under publicly announced program (in thousands)(1) | ||||||||||||||||||||||
| February 1 - 28, 2026 | 4,694,162 | $ | 7.48 | 4,694,162 | 28,021 | |||||||||||||||||||||
| March 1 - 31, 2026 | 3,838,676 | $ | 7.30 | 3,838,676 | — | |||||||||||||||||||||
| April 1 - 30, 2026 | — | $ | — | — | — | |||||||||||||||||||||
| Total | 8,532,838 | 8,532,838 | ||||||||||||||||||||||||
(1) In March 2025, our Board of Directors authorized a stock repurchase program of up to $150.0 million of our common stock, which was subsequently increased to $200.0 million in August 2025. Share repurchases under share repurchase program may be made from time to time on the open market, pursuant to Rule 10b5-1 trading plans, or other legally permissible means. The share repurchase program does not obligate us to acquire a specified number of shares, and may be suspended, modified, or terminated at any time, without prior notice. The number of shares to be repurchased will depend on market conditions and other factors. The share repurchase program was completed in March 2026, as the dollar value of shares to be repurchased as authorized by the Board of Directors was reached. See Note 12. Common Stock and Stockholders’ Equity elsewhere in this Quarterly Report on Form 10-Q for additional information related to share repurchases.
(2) Average price paid per share excludes cash paid for commissions.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Arrangements
During the three months ended April 30, 2026, none of the Company’s directors or Section 16 officers adopted terminated
Item 6. Exhibits
The following exhibits are filed as part of this report or hereby incorporated by references to filings previously made with the SEC.
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| Incorporated by Reference | |||||||||||||||||||||||||||||||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed or Furnished Herewith | |||||||||||||||||||||||||||||
| 3.1 | 8-K | 001-38856 | 3.1 | April 15, 2019 | |||||||||||||||||||||||||||||||
| 3.2 | 8-K | 001-38856 | 3.2 | April 15, 2019 | |||||||||||||||||||||||||||||||
| 10.1 | X | ||||||||||||||||||||||||||||||||||
| 10.2 | X | ||||||||||||||||||||||||||||||||||
| 10.3 | X | ||||||||||||||||||||||||||||||||||
| 10.4 | X | ||||||||||||||||||||||||||||||||||
| 31.1 | X | ||||||||||||||||||||||||||||||||||
| 31.2 | X | ||||||||||||||||||||||||||||||||||
| 32.1* | X | ||||||||||||||||||||||||||||||||||
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | X | |||||||||||||||||||||||||||||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document. | X | |||||||||||||||||||||||||||||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | X | |||||||||||||||||||||||||||||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | X | |||||||||||||||||||||||||||||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | X | |||||||||||||||||||||||||||||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | X | |||||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | X | |||||||||||||||||||||||||||||||||
* The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.
† Indicates a management contract or compensatory plan.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| PAGERDUTY, INC. | ||||||||
(registrant) | ||||||||
May 28, 2026 | /s/ John DiLullo | |||||||
Date | John DiLullo | |||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
May 28, 2026 | /s/ Owen Howard Wilson | |||||||
| Date | Owen Howard Wilson | |||||||
Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
May 28, 2026 | /s/ Paul Underwood | |||||||
| Date | Paul Underwood | |||||||
Chief Accounting Officer | ||||||||
(Principal Accounting Officer) | ||||||||
41
Exhibit 10.1
May 11, 2026
Ms. Jennifer Tejada
Dear Jennifer:
This letter sets forth the terms of the transition of your services to PagerDuty, Inc., a Delaware corporation (the “Company” or “PagerDuty”) as its Chief Executive Officer (“CEO”) to the role of “Executive Chair.”
1.Resignation and Transition to Executive Chair
You and the Company agree that, pursuant to the Company’s planned leadership transition, you will cease serving as the Company’s Chief Executive Officer and principal executive officer of the Company (collectively, “CEO”), effective as of May 11, 2026, which is the effective date of the appointment of the Company’s new CEO (the “Appointment Date”).
It is anticipated that you will continue to serve as the Company’s CEO until the earlier of
(a) the Appointment Date or (b) such date on which your employment with the Company terminates for any reason. On the Appointment Date, it is anticipated that you will continue your at-will employment with the Company on a temporary basis, in a full-time exempt position as Executive Chair, until December 1, 2026, or such other date as may be mutually agreed between you and the Company (such date, the “Board Transition Date,” and such period of time during which you actually remain employed from the Appointment Date until the Board Transition Date, the “Executive Chair Period”). During the Executive Chair Period, it is anticipated that you will report solely to the Board of Directors of the Company (the “Board”). Your employment with the Company and your status as a Company officer shall terminate on the Board Transition Date, and from the Board Transition Date until the date of the Company’s 2027 Annual General Meeting (the “2027 AGM” and such period, the “Non-Employee Director Period”), you shall remain a non-employee member of the Board. Effective as of the date of the 2027 AGM, unless otherwise agreed between you and the Company, your services as a non-employee member of the Board shall terminate, and you shall resign from all remaining positions you may hold with the Company and its affiliates.
2.Compensation
a.Employment Compensation. Reference is hereby made to your Second Amended and Restated Offer Letter by and between you and the Company, dated as of October 30, 2023 (the “Offer Letter”). During the Executive Chair Period, you shall remain eligible for payment of your base salary and employee benefits pursuant to the terms of your Offer Letter and in accordance with the Company’s standard payroll policies, subject
to applicable withholdings and other required deductions; provided, that your annual bonus in respect of fiscal year 2027 will be prorated for the period from February 1, 2026 through the Appointment Date (the “Pro-Rated Bonus”) and shall be paid to you at the time as other senior executives of the Company are eligible to be paid their bonuses in 2027, subject to your continued employment through the Appointment Date (unless your employment is earlier terminated by the Company without Cause (as defined in your Offer Letter)). You shall not be eligible to receive an annual bonus in respect of the Executive Chair Period or in respect of your service thereafter.
b.Non-Employee Director Compensation. During the Non-Employee Director Period, you shall be eligible to receive compensation in respect of your services on the Board, in accordance with the Company’s non-employee director compensation policy as in effect from time to time, but you shall no longer be eligible for base salary, participation in the Company’s annual bonus program or other employee benefit plans.
3.Equity Awards
a.In respect of your grant of 530,035 restricted stock units (“April 2026 RSUs”) pursuant to the Company’s 2019 Employee Incentive Plan on April 2, 2026, notwithstanding anything to the contrary in the applicable award agreement, all of your April 2026 RSUs that remain unvested as of the date of the 2027 AGM shall vest in full on the date of the 2027 AGM (without regard to any agreed extension of your Board service following the 2027 AGM), subject to your continuous service on the Board through the date of the 2027 AGM (except as otherwise set forth in Section 3(c)). Any April 2026 RSUs that become vested in accordance with this Section 3(a) shall be settled on the terms set forth in the applicable award agreement.
b.Your equity awards granted prior to April 2, 2026 (“Prior Awards”) will continue to remain outstanding and eligible to vest under the existing terms and conditions set forth in the governing plan documents and option, restricted stock unit or other applicable equity agreements, in each case, through the date of the 2027 AGM; provided that, subject to your continuous service on the Board through the date of the 2027 AGM (except as otherwise set forth in Section 3(c)), any Prior Award that remains unvested as of the date of the 2027 AGM shall vest in full on the date of the 2027 AGM (without regard to any agreed extension of your Board service following the 2027 AGM). Any Prior Awards that become vested in accordance with this Section 3(b) shall be settled (as applicable) on the terms set forth in the applicable award agreement.
Notwithstanding anything to the contrary in Section 3(a) or Section 3(b), upon the involuntary termination of your employment during the Executive Chair Period without Cause, or your resignation from employment during the Executive Chair Period due to the Company’s breach of this Agreement (subject to the notice and cure provisions applicable to a “Good Reason” resignation as set forth in your Offer Letter), or upon the involuntary termination of your Board service during the Non-Employee Director Period, in each case, in the absence of circumstances that would constitute Cause had you remained employed, then subject to your execution and non-revocation of a release of claims in the form appended to your Offer Letter, all of your April 2026 RSUs and
-2- | ||
Prior Awards that remain unvested on the date of termination of your employment or service shall immediately vest in full and be settled within thirty (30) days following the date of your termination of employment or service, subject to your execution and non-revocation of a release of claims in the form appended to your Offer Letter.
4.Benefits
As a regular employee of the Company through the Executive Chair Period, you will remain eligible to participate in the Company’s employee benefit plans and programs during the Executive Chair Period, on the terms set forth in your Offer Letter. If your termination of employment occurs on the Board Transition Date or due to your earlier termination of employment by the Company without Cause, you will be eligible for the COBRA benefit described in your Offer Letter (the “COBRA Benefit”), which shall apply from the date your employment terminates until the first anniversary of the 2027 AGM; provided, that the Company may provide you with a cash payment, in equal amount on an after tax basis, in lieu of the COBRA Benefit in respect of any period in which applicable law would prevent the Company from providing the COBRA Benefit to you (as determined by the Company in its discretion).
The Company will directly pay the law firm of your choosing reasonable and documented legal fees and expenses incurred by you in connection with the negotiation, preparation, and execution of this letter, in an aggregate amount not to exceed $30,000.
Following the termination of your employment and Board service for any reason, the Company shall continue to provide you with coverage under its directors’ and officers’ liability insurance policies (and any successor policies) on terms no less favorable than those provided to other former directors and officers of the Company for a period of not less than six (6) years following the date of the 2027 AGM (or, if later, the date of the termination of your Board service). The Company shall also continue to honor any indemnification agreement between you and the Company in accordance with its terms.
5.Acknowledgement
You acknowledge and agree that this letter and the transitions contemplated herein (including the associated changes to the terms of your employment, compensation and benefits) do not and will not constitute Good Reason (as defined in your Offer Letter) or entitle you to any severance benefits that would otherwise be payable upon an Involuntary Termination not within the Change in Control Period under your Offer Letter, or otherwise entitle you to any severance payment or benefits under the Company’s Executive Severance Policy or otherwise (even if any such changes occur prior to the Appointment Date or during the Executive Chair Period). In connection with your employment transition on the Appointment Date and your subsequent termination of employment on the Board Transition Date, the sole payments and benefits for which you shall be eligible are as set forth in this letter, and you hereby waive your opportunity to receive any additional payments and benefits set forth in Section 6 of the Offer Letter that would be payable upon an Involuntary Termination not within the Change in Control Period.
Notwithstanding the foregoing, in the event you experience an Involuntary Termination within the Change in Control Period under your Offer Letter during the Executive Chair Period or
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during the Non-Employee Director Period (treating your continued Board service for such purpose as continued employment during such period), you shall be eligible to receive (i) a lump-sum cash payment equal to 1.5 times the sum of your base salary and target bonus as in effect on the day immediately preceding the Appointment Date, plus $12,000, (ii) the Pro-Rated Bonus, (iii) the payments and benefits contemplated by Section 3 of this letter (including 100% acceleration of all unvested equity awards), and (iv) the COBRA Benefit for a period of eighteen (18) months following the date of your CIC Qualifying Termination; provided, that you shall not be eligible for any other compensation or benefits, including under Section 6 of your Offer Letter, in connection with such CIC Qualifying Termination.
6.Confidential Information and Invention Assignment Agreement
By signing this letter, you reaffirm and agree to continue to comply with the terms and conditions of the At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement by and between you and the Company. You will also continue to comply with all applicable Company policies.
Notwithstanding the foregoing, the Company hereby informs you that, notwithstanding any provision of this letter or the At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement to the contrary, an individual may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that
(a) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law, or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the employer’s trade secrets to the attorney and use the trade secret information in the court proceeding if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order. In addition, notwithstanding anything in this letter or the At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement to the contrary, nothing in this letter or the At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement shall impair your rights under the whistleblower provisions of any applicable federal, state or local law or regulation or, for the avoidance of doubt, limit your right to receive an award for information provided to any government authority under such law or regulation.
7.Employment Relationship
From the date hereof until the Board Transition Date, your employment with the Company will remain “at will,” meaning that either you or the Company may terminate your employment at any time and for any reason, with or without Cause, provided that the Company shall provide you with not less than thirty (30) days’ prior written notice of any termination of your employment (other than a termination for Cause), and any such termination by the Company (other than for Cause) shall be treated as an involuntary termination without Cause for all purposes of this letter. Any contrary representations which may have been made to you are superseded by this letter. This is the full and complete agreement between you and the Company on this term. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and
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procedures, may change from time to time, the “at will” nature of your employment may only be changed in an express written agreement approved by the Board.
8.Outside Activities
While you render services to the Company, you agree that you will not engage in any other employment, consulting or similar activity that may interfere with your job duties without the written consent of the Company. In addition, while you render services to the Company, you will not assist any person or entity in competing with the Company, in preparing to compete with the Company or in hiring any employees or consultants of the Company. From the date hereof until the 2027 AGM, you acknowledge and agree that the restrictions set forth in Section 1(c) of your Offer Letter will remain in effect, with references therein to your employment to be deemed to refer to your continued employment or service, as applicable, following the Appointment Date.
9.Withholding Taxes
All forms of compensation referred to in this letter are subject to applicable withholding and payroll taxes.
10.Governing Law; Jurisdiction. This letter shall be governed by and construed in accordance with the laws of California. Any and all disputes arising under this letter shall be subject to the exclusive jurisdiction of the Federal or State Courts of California.
11.Entire Agreement
This letter supersedes and replaces any prior understandings or agreements, whether oral, written or implied, between you and the Company regarding the matters described in this letter. Notwithstanding the foregoing, the Offer Letter shall remain in effect in accordance with its terms through the Board Transition Date, and thereafter in accordance with Sections 4, 5 and 9 of this letter; provided, that Sections 7, 8, 9, 10 and 11(e) of the Offer Letter shall remain in full force and effect on and after the date of this letter and are incorporated by reference herein, mutatis mutandis.
12.Severability. All of the provisions of this letter are distinct and severable. If any part, term or provision of this letter should be held to be illegal, invalid, unenforceable or in conflict with any applicable law, then the remaining valid and enforceable provisions shall continue in full force and effect.
If you wish to accept the terms of this letter, please sign and date both the enclosed duplicate original of this letter and return them to me.
[Signature Page Follows]
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ACCEPTED AND AGREED: PagerDuty, Inc.
Name: Jennifer Tejada By: /s/ Jennifer Tejada
(Print Employee Name) (Signature)
By: /s/ Christopher Ferro By: Christopher Ferro
(Signature)
Date: May 11, 2026 Title: Chief Legal Officer & Secretary
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Exhibit 10.2
May 11, 2026
John DiLullo
Re: Offer Letter
Dear John,
On behalf of PagerDuty, Inc. (the “Company”), I am pleased to offer you the position of Chief Executive Officer (“CEO”) of the Company on the terms set forth in this letter agreement (this “Agreement”). We believe that you will contribute greatly to the success of the Company.
1.Position; Location.
(a)You will serve as CEO of the Company. As the CEO, you will report solely and directly to the Company’s Board of Directors (the “Board”).
(b)While serving as CEO of the Company, you will be nominated to serve as a member of the Board of Directors of the Company (the “Board”), such service to be subject to stockholder approval in accordance with the Company’s certificate of incorporation and bylaws. You shall not be entitled to any additional compensation in respect of your service on the Board.
(c)You agree that, to the best of your ability and experience, you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of your employment, you further agree that (i) you will devote substantially all of your business time and attention to the business of the Company, (ii) the Company will be entitled to all of the benefits and profits arising from or incident to all such work services, (iii) you will not render commercial or professional services of any nature to any person or organization without the prior written approval of the Board, and (iv) you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Notwithstanding the above, you may continue, on your own time, at your own expense and so as to not interfere with your duties and responsibilities at the Company to (i) serve on boards of directors (or similar governing bodies) on which you serve as of the date hereof, which are set forth on Exhibit A, which the Company agrees are not competitive entities based on their respective businesses as conducted as of the date hereof, provided, further, that you may not serve on any additional boards of directors (or similar governing bodies), regardless of whether such additional board service would increase the total number of boards on which you serve, without the Company’s prior written approval, (ii) accept speaking or presentation engagements in exchange for honoraria, and (iii) participate in civic, educational, charitable or fraternal organizations. This Agreement does not prevent you from
owning no more than one percent (1%) of the outstanding equity securities of a corporation whose stock is listed on a national stock exchange and is a competitor or potential competitor of the Company.
(d)Your principal place of employment will be at the Company’s headquarters in San Francisco, California. You may be required to travel for business purposes from time to time, consistent with the needs of the Company.
2.Start Date. The effective date of your full-time employment will be May 11, 2026. Your employment with the Company will be for an indefinite period and will continue until terminated in accordance with this Agreement.
3.Compensation.
(a)Base Salary. You will be paid a monthly salary at a rate of $50,000, which is equivalent to $600,000 on an annualized basis, which will be paid semi-monthly in accordance with the Company’s normal payroll procedures and subject to applicable withholding.
(b)Annual Bonus. You will be eligible to earn an annual bonus of $600,000 (subject to applicable withholding) under the Company’s Short-Term Incentive Program based on achievement of objective and subjective performance criteria agreed upon by you and the Board; provided that, with respect to the Company’s 2027 fiscal year only, your annual bonus will be pro-rated, with a minimum bonus payment in respect of the Company’s 2027 fiscal year in an amount equal to $300,000. Any annual bonus will be paid as soon as reasonably practicable following the end of the applicable fiscal year (and in any event by April 15 following the end of the applicable fiscal year). You shall be eligible to receive such bonus if the applicable objectives and milestones are achieved while you remain employed by the Company, and you remain in employment with the Company until the payment date of the bonus. For the avoidance of doubt, in the event that your employment with the Company terminates for any reason prior to the payment date of a bonus, you will not earn or be paid such bonus. The Company, in its sole discretion based on achievement of objective and subjective performance criteria agreed upon by you and the Board, will determine whether you have earned a bonus (or portion thereof), and its determination will be final and binding.
(c)Annual Review. Your compensation will be reviewed by the Board or the Compensation Committee (the “Compensation Committee”) of the Board annually.
(d)Equity Awards. In connection with the commencement of your employment, you shall be eligible to receive the equity awards set forth in Exhibit B, in each case subject to approval by the Board or the Compensation Committee, pursuant to the terms and conditions of the PagerDuty, Inc. 2019 Equity Incentive Plan (the “2019 Plan”) and the applicable award agreement governing such awards. For clarity, the awards set forth in Exhibit B shall be one-time awards, and beginning in April 2027, you will be eligible to receive additional equity-based awards as determined by the Compensation Committee from time to time in its discretion.
4.Benefits. As an employee, you will be eligible to receive employee benefits consistent with those generally provided to other senior executives of the Company.
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5.Termination; Severance Benefits. You may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying the Company; provided, that you endeavor to give the Company at least two (2) weeks’ advance written notice of your resignation. Likewise, the Company may terminate your employment at any time, with or without Cause or advance notice.
(a)General. Upon any termination of your employment, you shall be eligible to receive those payments required to be made to you by law. This includes payment of salary earned through the date of your termination and accrued but unused paid time off to the extent payment for such unused paid time off is required by the Company’s paid time off policy or by law. You may also be entitled to benefits or payments under the terms of certain plans in which you participated, which payments will be determined by the provisions of the governing plan documents.
(b)Qualifying Termination. Except as otherwise set forth in Section 5(c), in the event that the Company terminates your employment for a reason other than Cause (not including a termination due to death or Disability) or you resign for Good Reason (either, a “Qualifying Termination”), subject to your satisfaction of the Conditions (as defined below) before the Deadline (as defined below), the Company will provide you with the following severance payments and benefits, in each case, less applicable deductions and withholdings: (i) a lump sum cash payment equal to the sum of your annual base salary and target annual bonus opportunity, in each case as in effect on the date of such Qualifying Termination; (ii) the treatment of your then outstanding equity awards as set forth in Exhibit B; (iii) a prorated amount of your target annual bonus opportunity from the beginning of the Company’s fiscal year until the date of your Qualifying Termination, payable in a lump sum; and (iv) provided you timely elect continued group health plan coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay directly or reimburse your COBRA premiums for a period of twelve (12) months following the date of your Qualifying Termination.
(c)Qualifying Termination Within Change in Control Period. In the event of your Qualifying Termination during the period that commences three (3) months before and ends twenty-four (24) months after a Change in Control (such period, the “Change in Control Period”), the Company will provide you with the following severance payments and benefits, in each case, less applicable deductions and withholdings: (i) a lump sum cash payment equal to one and one-half (1.5) times the sum of your annual base salary and target annual bonus opportunity; (ii) the treatment of your then outstanding equity awards as set forth in Exhibit B; (iii) a prorated amount of your target annual bonus opportunity from the beginning of the Company’s fiscal year until the date of your Qualifying Termination, payable in a lump sum; and (iv) provided you timely elect continued group health plan coverage under COBRA, the Company shall pay directly or reimburse your COBRA premiums for a period of eighteen (18) months following the date of your Qualifying Termination; provided that in each case of clauses (i) and (iii), annual base salary and target annual bonus opportunity shall be determined based on the rates in effect as of immediately prior to your Qualifying Termination or immediately prior to the Change in Control, whichever is greater.
(d)Payment. The cash amounts payable pursuant to Section 5(b) or Section 5(c) are referred to hereafter as collectively, the “Severance.” The Severance will be paid in a single lump sum on the Company’s first regular payroll date (the “Initial Payment Date”) that occurs following the effective date of the Release (as
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defined in Section 5(i)), provided that (i) the Initial Payment Date shall be no later than the fifteenth (15th) day of the third month following the end of the later of the Company’s or your taxable year in which the Qualifying Termination occurs, and (ii) in the event your Qualifying Termination occurs within the Change in Control Period and prior to the consummation of a Change in Control, you initially shall be entitled to the severance payments and benefits set forth in Section 5(b) (with any Severance payable on the Initial Payment Date) and shall, upon the occurrence of the Change in Control, become entitled to the additional severance payments and benefits set forth in Section 5(c) to the extent not already paid or provided (for clarity, the treatment of equity awards in such event is set forth in the immediately preceding paragraph). For the avoidance of doubt, the amounts payable under Section 5(c) shall not be in duplication of any amounts paid under Section 5(b).
(e)Cause. For purposes of this Agreement, “Cause” shall mean (i) the conviction of, or the entering a plea of guilty or no contest to or for, any felony, (ii) the commission of an act of fraud, embezzlement, misappropriation, willful misconduct or breach of fiduciary duty against the Company or other similar conduct materially harmful or potentially materially harmful to the Company’s best interest, as determined by the Board, in its reasonable sole discretion, (iii) the commission of a material breach of any of the covenants, representations, terms or provisions of the Company’s At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement or this Agreement or (iv) the willful and repeated failure to perform assigned duties or responsibilities as the Company’s CEO, which failure is not corrected by you within ten (10) days of written notice from the Board thereof; provided that in each case of clauses (ii) through (iv), the applicable conduct must be willful (i.e., carried out in bad faith or without reasonable belief that such conduct was in the best interests of the Company and its subsidiaries) and materially and demonstrably injurious to the Company and its subsidiaries, taken as a whole. Notwithstanding the foregoing or any other provision of this Agreement to the contrary, after a Change in Control, any arbitrator, court or tribunal that adjudicates any dispute, controversy or claim in connection with this Agreement shall apply a de novo standard of review to any determinations made by the Board or the Company or its affiliates concerning the existence of Cause or your entitlement to severance payments or benefits. Such de novo standard shall apply notwithstanding the grant of full discretion hereunder to the Board or any person or characterization of any decision by the Board or by such person as final, binding or conclusive on any party.
(f)Good Reason. For purposes of this Agreement, “Good Reason” shall mean, without your written consent, (i) a material reduction of your duties or responsibilities relative to your duties or responsibilities in effect immediately prior to such reduction; (ii) a material reduction by the Company of your annual base salary or target annual bonus opportunity, in each case as in effect immediately prior to such reduction; (iii) your relocation to a facility or a location more than thirty (30) miles from your then current location which increases your commute time from your principal residence (for the avoidance of doubt, not including any business travel contemplated by Section 1(d)); or (iv) any material breach by the Company of this Agreement.
(g)Change in Control. For the purposes of this Agreement, a “Change in Control” shall have the meaning given to “Change in Control” in the 2019 Plan, provided that, notwithstanding the language in the 2019 Plan, a definition of “Change in Control” (or any analogous term) in an individual written agreement between you
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and the Company or any Affiliate (as defined in the 2019 Plan) will not supersede the definition set forth in the 2019 Plan with respect to this Agreement. If a Change in Control (based on the definition thereof as of the time of the event constituting a Change in Control) occurs, the term “Change in Control” may not be subsequently modified in a manner that would cause the event constituting a Change in Control to not so qualify.
(h)Disability. For purposes of this Agreement, “Disability” shall mean that you have been unable to perform your duties hereunder as the result of incapacity due to physical or mental illness, and such inability, which continues for at least forty-five (45) consecutive calendar days or ninety (90) calendar days during any consecutive twelve-month period, if shorter, after its commencement, is determined to be total and permanent by a physician selected by the Company and its insurers and acceptable to you or to your legal representative (with such agreement on acceptability not to be unreasonably withheld).
(i)Release Condition. To receive the Severance, accelerated vesting of equity awards and COBRA premium benefits described in this Section 5, you must (i) execute a general release of all claims in the form attached hereto as Exhibit C (the “Release”), (ii) resign as a member of the Board and from all other positions you may hold with the Company and its affiliates, and (iii) return all property of the Company in your possession (with (i), (ii) and (iii) collectively, the “Conditions”), all occurring within twenty-one (21) days (or forty-five (45) days if required by the federal Age Discrimination in Employment Act) following the date on which you receive the Release from the Company (the “Deadline”).
(j)Full Settlement. The payments and benefits provided under this Section 5 shall be in full satisfaction of the obligations of the Company and its affiliates to you under this Agreement or any other plan, agreement, policy or arrangement of the Company and its affiliates upon your termination of employment, and in no event shall you be entitled to severance pay or benefits beyond those specified in this Section 5.
(k)No Mitigation. You are not required to seek other employment or to attempt in any way to reduce any amounts otherwise payable to you under this Agreement.
6.Section 409A. Notwithstanding anything to the contrary in the foregoing, in the event that you qualify as a “specified employee” of a publicly traded company, as defined by Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (the “Code”), then solely to the extent required to avoid the imposition of additional taxes on you under Section 409A, the payment of any severance pursuant to Section 5 shall be delayed until the earlier of the date that is at least six months and one day following the date upon which you become entitled to such severance payment or your earlier death. Upon the first business day after such earlier date, all payments deferred pursuant to this Section 6 shall be paid in a lump sum to you or your estate, and any remaining payments due under this Agreement shall be paid as otherwise provided herein. Payments pursuant to this Agreement (or referenced in this Agreement), and each installment thereof, are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the regulations under Section 409A. To the extent that any provision of this Agreement is ambiguous as to its exemption or compliance with Section 409A, the provision will be read in such a manner so that all payments hereunder are exempt from Section 409A to the maximum permissible extent, and for any payments where such construction is not tenable, that those payments comply with Section 409A to the maximum permissible extent. To the
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extent any payment under this Agreement may be classified as a “short-term deferral” within the meaning of Section 409A, such payment shall be deemed a short-term deferral, even if it may also qualify for an exemption from Section 409A under another provision of Section 409A. Notwithstanding any other provision of this Agreement, with respect to payments to be made upon execution of an effective release, if the release revocation period spans two calendar years, payments will be made in the second of the two calendar years to the extent necessary to avoid adverse taxation under Section 409A. Notwithstanding anything to the contrary in this Agreement, all reimbursements and in-kind benefits provided under this Agreement that are subject to Section 409A shall be made in accordance with the requirements of Section 409A, including, where applicable, the requirement that (a) any reimbursement is for expenses incurred during your lifetime (or during a shorter period of time specified in this Agreement); (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (c) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred; and (d) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit. If reasonably requested by the Company or you, the parties shall amend or modify this Agreement in order to comply with the provisions of Section 409A, to the extent applicable.
7.Section 280G. Any provision of this Agreement to the contrary notwithstanding, if any payment or benefit you would receive from the Company pursuant to this Agreement or otherwise (a “Payment”) would (a) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (b) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount (defined below). The “Reduced Amount” will be either (i) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (ii) the total amount of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in you receiving, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction will occur in the manner that results in the greatest economic benefit to you. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced by mutual agreement of the parties. If deemed necessary for compliance with Section 409A, any reduction will occur first with respect to amounts that are not “deferred compensation” within the meaning of Section 409A and then with respect to amounts that are. To the extent any such payment is to be made over time (e.g., in installments), then the Payments shall be reduced in reverse chronological order. In no event will the Company or any stockholder be liable to you for any amounts not paid as a result of the operation of this Section 7. All determinations under this Section 7 shall be made by a nationally recognized certified public accounting firm or other professional organization that is selected by the Company prior to a Change in Control for the purpose of making such determinations (which firm shall not, without your consent, be a firm serving as accountant or auditor for the individual, entity or group effecting the Change in Control) and shall be binding upon the Company and you. In connection with the determinations contemplated by this Section 7, the Company shall reimburse you in an amount of up to $50,000 for reasonable legal and professional fees you may incur in connection with the preparation and/or review of an analysis relating to Section 280G of the Code, including any required calculations or determinations.
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8.Confidentiality Agreement. As a Company employee, you will be expected to abide by Company rules and policies. As a condition of employment, you must sign and comply with the Company’s form of At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement, which prohibits unauthorized use or disclosure of Company proprietary information, among other obligations, and you will be bound by the Company’s Code of Conduct. Notwithstanding the foregoing, the Company hereby informs you that, notwithstanding any provision of this Agreement or the At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement to the contrary, an individual may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (a) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law, or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the employer’s trade secrets to the attorney and use the trade secret information in the court proceeding if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order. In addition, notwithstanding anything in this Agreement or the At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement to the contrary, nothing in this Agreement or the At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement shall impair your rights under the whistleblower provisions of any applicable federal, state or local law or regulation or, for the avoidance of doubt, limit your right to receive an award for information provided to any government authority under such law or regulation.
9.Indemnification. The Company shall indemnify you to the fullest extent allowed by law, in accordance with the terms of the Company’s Certificate of Incorporation and Bylaws, subject to the terms and conditions of the Company’s form of Indemnification Agreement for executive officers, and provide customary coverage for you under a directors & officers liability insurance policy to the extent such coverage and policy are provided to the other directors and officers of the Company.
10.Miscellaneous Provisions.
(a)Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflicts of law.
(b)Counterparts. This letter may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.
(c)Severability. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without such provision.
(d)Representations. You represent that you are not subject to any contractual or other restrictions (including any non-competition, non-solicitation, confidentiality or similar obligations to any prior employer or other person) that would impair your ability to provide services to the Company.
(e)Acknowledgment. You acknowledge that you have had the opportunity to discuss this matter with and obtain advice from your private attorney, have had sufficient
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time to, and have carefully read and fully understand all the provisions of this Agreement, and are knowingly and voluntarily entering into this Agreement.
(f)Arbitration. Except as provided below, you agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof shall be settled by arbitration, to the extent permitted by law, to be held in San Francisco County, California in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association. The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The arbitrator shall apply California law to the merits of any dispute or claim, without reference to rules of conflict of law. You hereby expressly consent to the personal jurisdiction of the state and federal courts located in California for any action or proceeding arising from or relating to this Agreement and/or relating to any arbitration in which the parties are participants.
(g)Legal Fees for Arbitration. The Company agrees to pay as incurred (within ten (10) days following the Company’s receipt of an invoice from you), at any time following a Change in Control and to the full extent permitted by law, all arbitration and legal fees and expenses that you may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, you or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof whether such contest is between the Company and you or between either of you and any third party, plus in each case interest on any delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code determined as of the date such legal fees and expenses were incurred; provided that you shall repay to the Company any such legal fees and expenses if your claims are found by a court or arbitral tribunal of competent jurisdiction to be frivolous or brought in bad faith.
YOU HAVE READ AND UNDERSTAND THESE PROVISIONS, WHICH DISCUSS ARBITRATION. YOU UNDERSTAND THAT BY SIGNING THIS AGREEMENT, YOU AGREE TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS LETTER, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH, OR TERMINATION THEREOF TO BINDING ARBITRATION TO THE EXTENT PERMITTED BY LAW, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF YOUR RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EXECUTIVE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:
(i)ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION;
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NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION;
(ii)ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL, STATE OR MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, AND THE FAIR LABOR STANDARDS ACT;
(iii)ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION, SUBJECT TO APPLICABLE LAW.
To accept the terms of this Agreement, please sign and date this Agreement in the space provided below. A duplicate original is enclosed for your records. This Agreement, together with your At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement and any equity award agreements you may enter into, forms the complete and exclusive statement of your employment agreement with the Company. It supersedes any other agreements or promises made to you by anyone, whether oral or written, including without limitation that certain term sheet setting forth a summary of the material terms of this Agreement; provided, that certain Sign-On Bonus Letter Agreement by and between you and the Company dated as of the date hereof shall not be superseded and shall remain in effect. This Agreement may not be modified or amended except by a written agreement signed by you and an authorized member of the Board (other than you).
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
PagerDuty, Inc.
By: /s/ Zachary Nelson
Zachary Nelson, Chair of the Compensation
Committee of the Board
Zachary Nelson, Chair of the Compensation
Committee of the Board
Agreed and Accepted:
/s/ John DiLullo
John DiLullo
John DiLullo
[Signature Page to Offer Letter]
EXHIBIT A
OUTSIDE BOARDS
1. D-Wave Systems, NYSE: QBTS Board Member
2. Tetrate.io, (Privately Held) Board Advisor
3.Palmilla Mexico, Home Owner Association (Non-profit) Board Member
4.Villanova University, (Non-profit) Engineering Advisory Board Member
5.Deepwatch, Inc. (Privately Held) Board Member/Advisor
EXHIBIT B
EQUITY AWARDS
1. Grant of Equity-Based Awards. Pursuant to Section 3(d) of the Agreement, you will be eligible to be granted the following equity-based awards with an aggregate target value of $19,000,000, subject in each case to approval by the Board or the Compensation Committee and pursuant to the terms and conditions of the 2019 Plan and the applicable award agreements, except as otherwise set forth herein. The number of shares of Common Stock (as defined in the 2019 Plan) subject to the equity awards granted pursuant to this Exhibit B will be determined by dividing (i) the target value of each such award, by (ii) $8.49, rounded down to the nearest whole number.
(a)Sign-On RSU Grant. You shall be granted a restricted stock unit award with a target value of $7,000,000 (the “Sign-On RSU Grant”) on or around your Start Date. The Sign-On RSU Grant will vest over four years, with twenty-five percent (25%) vesting on April 2, 2027 and the remaining seventy-five percent (75%) vesting in twelve (12) equal quarterly installments thereafter, in each case, subject to your continued employment with the Company through the applicable vesting date, except as otherwise provided in this Exhibit B.
(b)PSU Grant. You shall be granted a performance-based restricted stock unit award with a target value of $7,000,000 (the “PSU Grant”) on or around your Start Date. One-third (1/3) of the PSU Grant (i.e., with a target value of $2,333,333.33) (the “rTSR PSUs”) will be eligible to be earned based on the Company’s weighted total shareholder return from your Start Date through April 2, 2027, as determined by the Board relative to the BVP NASDAQ Emerging Cloud Index “EMCLOUD” Index (“rTSR”), with payout opportunities ranging from fifty percent (50%) to two hundred percent (200%) of target based on rTSR performance achievement as set forth below, with cliff vesting at each applicable payout level:
| rTSR | rTSR PSU Payout | ||||
| 0 – 24.9% | 50% | ||||
| 24.9% – 49.9% | 100% | ||||
| 49.9% – 74.9% | 150% | ||||
| 75% and higher | 200% | ||||
The rTSR PSUs, to the extent earned, will fully vest on April 2, 2027, subject to your continued employment with the Company through such date, except as otherwise provided in Section 2 or Section 3 of this Exhibit B. For clarity, in no case will fewer than 50% of the rTSR PSUs originally granted be earned.
The remaining two-thirds (2/3) of the PSU Grant shall vest ratably over the subsequent two fiscal years of the Company (i.e., one-third (1/3) of the PSU Grant shall be eligible to vest on each of April 2, 2028 and April 2, 2029), with an annual target value of $2,333,333.33 per fiscal year, based on the achievement of annual performance criteria established under the
Company’s operating plan for each such fiscal year, as determined by the Board.
(c)Market-Based RSU Grants. You shall be eligible for two market-based restricted stock unit awards (each, a “Market-Based RSU Grant”) on the terms set forth below.
(i)First Market-Based RSU Grant. You shall be eligible for a restricted stock unit award with a target value of $2,500,000 (the “First Market-Based RSU Grant”), to be granted as soon as reasonably practicable following the first date occurring more than sixty (60) trading days after your Start Date on which the average of the closing price per share of Common Stock on the NYSE for the preceding sixty (60) trading days equals or exceeds $10.00, provided that such Common Stock price is certified by the Board or Compensation Committee as having been achieved in a manner aligned with the Company’s strategy and consistent with the Company’s business plan (as developed in consultation with the Company’s management and approved by the Board). If the applicable stock price threshold is not achieved prior to the third (3rd) anniversary of your Start Date, the First Market-Based RSU Grant will not be granted, and your opportunity to receive the First Market-Based RSU Grant shall be forfeited.
(ii)Second Market-Based RSU Grant. You shall be eligible for a restricted stock unit award with a target value of $2,500,000 (the “Second Market-Based RSU Grant”), to be granted as soon as reasonably practicable following the first date occurring more than sixty (60) trading days after your Start Date on which the average of the closing price per share of Common Stock on the NYSE for the preceding sixty (60) trading days equals or exceeds $13.00, provided that such Common Stock price is certified by the Board or Compensation Committee as having been achieved in a manner aligned with the Company’s strategy and consistent with the Company’s business plan (as developed in consultation with the Company’s management and approved by the Board). If the applicable stock price threshold is not achieved prior to the fifth (5th) anniversary of your Start Date, the Second Market-Based RSU Grant will not be granted, and your opportunity to receive the Second Market-Based RSU Grant shall be forfeited.
(iii)General. The Market-Based RSU Grants, if granted, shall each vest over four (4) years following the applicable grant date, with twenty-five percent (25%) of each such Market-Based RSU Grant being immediately vested on the applicable grant date, and the remaining seventy-five percent (75%) of each such Market-Based RSU Grant vesting in twelve (12) equal quarterly installments thereafter, in each case, subject to your continued employment with the Company through the applicable vesting date, except as otherwise provided in Section 2 or Section 3 of this Exhibit B.
2.Qualifying Termination. Pursuant to Section 5(b)(ii) of the Agreement, in the event you experience a Qualifying Termination not within the Change in Control Period, subject to your satisfaction of the Conditions before the Deadline, fifty percent (50%) of the shares of Common Stock originally subject to each then outstanding and unvested equity award (or such lesser amount that remains outstanding) that remains subject solely to time-based vesting as of the date of such Qualifying Termination shall accelerate vesting, which for clarity shall consist of (a) your Sign-On RSU Grant, (b) your rTSR PSUs, to the extent the rTSR condition was previously achieved, (c) your Market-Based RSUs, to the extent the applicable stock price threshold was previously achieved, and (d) any additional equity awards subject solely to time-based vesting that may be granted following the date of this Agreement (collectively, your “Time-Based Equity Awards”). For the avoidance of doubt, in
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the event of any Qualifying Termination not within the Change in Control Period, any portion of your PSU Grant that remains subject to performance-based vesting conditions, and any Market-Based RSU Grant for which the applicable stock price threshold has not previously been achieved, will be forfeited.
3.Qualifying Termination Within Change in Control Period. Pursuant to Section 5(c)(ii) of the Agreement, in the event you experience a Qualifying Termination within the Change in Control Period, subject to your satisfaction of the Conditions before the Deadline, the Company will provide you with the following severance payments and benefits, in each case, less applicable deductions and withholdings: (a) one hundred percent (100%) of your then outstanding and unvested Time-Based Equity Awards shall accelerate vesting; (b) the Company will provide you with a lump sum cash payment (or a number of shares of Common Stock of equivalent value) in respect of your PSU Grant equal to the product of (x) $2,333,333.33, multiplied by (y) the number of fiscal years, if any, for which the applicable performance criteria have not previously been determined; (c) to the extent not treated as a Time-Based Equity Award, a lump sum cash payment (or a number of shares of Common Stock of equivalent value) in respect of your First Market-Based RSU Grant equal to $2,500,000, provided, that the price per share of Common Stock in such Change in Control transaction equals or exceeds $10.00 and such Qualifying Termination occurs prior to the thirty-six (36)-month anniversary of your Start Date; and (d) to the extent not treated as a Time-Based Equity Award, a lump sum cash payment (or a number of shares of Common Stock of equivalent value) in respect of your Second Market-Based RSU Grant equal to $2,500,000, provided, that the price per share of Common Stock in such Change in Control transaction equals or exceeds $13.00 and such Qualifying Termination occurs prior to the fifth (5th) anniversary of your Start Date. If your Qualifying Termination occurs within the Change in Control Period and prior to the consummation of a Change in Control, then notwithstanding the terms of the 2019 Plan and applicable award agreements, your unvested, outstanding Time-Based Equity Awards (or any equity awards that may become subject solely to time-based vesting if they were to remain outstanding for an additional three (3) months) will remain outstanding for a period of up to three (3) months to allow for the potential acceleration described herein (which acceleration, for clarity, will occur upon the Change in Control), with the treatment of equity awards that are not Time-Based Equity Awards subject to the terms of the applicable award agreements. The treatment of your equity awards set forth in this Section 3 of this Exhibit B shall be in full satisfaction of your rights under each applicable equity award agreement, and following the payment to you of amounts owed under this Section 3 of this Exhibit B, you shall have no further rights with respect to the Sign-On RSU Grant, PSU Grant, Market-Based RSU Grants, or other equity awards you may have been granted following the date hereof, except as otherwise set forth in an applicable award agreement.
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EXHIBIT C
FORM OF RELEASE
FORM OF RELEASE
In consideration for the payments and benefits to be provided pursuant to Section 5 of the Offer Letter and exhibits thereto (the “Agreement”) entered into by and between John DiLullo (“Executive”) and PagerDuty, Inc., a Delaware corporation (the “Company”), with an effective date of May 11, 2026, Executive agrees to the following release of claims (this “Release Agreement”):
(a)Executive acknowledges that Executive’s last day of employment with the Company will be [DATE] (such date, the “Termination Date”), and that as of the Termination Date, Executive shall cease to hold all positions as an employee, officer or director of the Company and its affiliates.
(b)Executive represents that Executive has not filed, and will not voluntarily file, any complaints, charges or lawsuits against the Company or against any Releasee (as defined below) with any governmental agency, other governmental body, or any court, based on any event or circumstance occurring on or prior to the Termination Date.
(c)Executive expressly waives all claims, whether known or unknown, against the Company and releases the Company, and any of the Company’s past, present or future parent, affiliated, related, and/or subsidiary entities, and all of the past and present directors, stockholders, officers, general or limited partners, employees, agents, and attorneys, and agents and representatives of such entities, and employee benefit plans in which Executive is or has been a participant by virtue of his or her employment with the Company (collectively, the “Releasees”), from any claims that Executive may have against the Company or the Releasees. It is understood that subject to the exceptions listed below, this release includes, but is not limited to, any claims arising directly or indirectly out of, relating to, or in any other way involving in any manner whatsoever, Executive’s employment with the Company or its subsidiaries or the termination thereof, including any claims for wages, employment benefits or damages of any kind whatsoever arising out of any legal restriction on the Company’s right to terminate employment, or any federal, state or other governmental statute or ordinance, including, without limitation, the Employee Retirement Income Security Act of 1974, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans With Disabilities Act, the Family and Medical Leave Act, the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the Genetic Information Nondiscrimination Act, the California Fair Employment and Housing Act, the California Labor Code, the California Family Rights Act, the California Equal Pay Act, the California Whistleblower Protection Act, and any other federal, state, or local law, statute, ordinance, regulation, or common-law doctrine relating to employment, compensation, benefits, discrimination, retaliation, or termination of employment, or any other legal limitation on the employment relationship (the “Release”); provided, however, notwithstanding anything to the contrary set forth herein, that this Release shall not extend to (i) benefit claims under employee benefit plans in which Executive is a participant by virtue of Executive’s employment with the Company or its subsidiaries, benefit claims under employee welfare benefit plans for occurrences (e.g., medical care, death, or onset of disability) arising after the execution of this Release by Executive, or any rights Executive may otherwise have to receive vested amounts under any Company employee benefit plans, (ii) any rights to ownership as a stockholder of the Company (or any successor thereto), (iii) Executive’s rights under the Agreement, (iv) any claims Executive may have for indemnification pursuant to the Company’s certificate of incorporation, bylaws, law, contract, Company policy or any indemnification agreement between Executive and the Company, (v) any claims for coverage under any
applicable directors’ and officers’ insurance policy in accordance with the terms of such policy, (vi) any claims to accrued, unpaid wages or unpaid reimbursements due to Executive, (vii) any rights to file an administrative charge or complaint with, or testify, assist, or participate in an investigation, hearing, or proceeding conducted by, the Equal Employment Opportunity Commission, Securities and Exchange Commission or other similar federal or state administrative agencies or self-regulatory agencies, or (viii) any claims arising from events that occur solely after the date Executive signs this Release.
Nothing in this Release Agreement or in the Agreement shall prohibit or restrict Executive from responding to any inquiry, or otherwise communicating with, any federal, state or local administrative or regulatory agency or authority or participating in an investigation conducted by any governmental agency or authority, or restrict Executive’s rights under the whistleblower provisions of any applicable federal law or regulation, including Executive’s right to receive an award for information provided to any government authority under such law or regulation.
Executive acknowledges that Executive has read and understands Section 1542 of the Civil Code of the State of California (Section 1542), which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
Executive waives and relinquishes any rights and benefits which Executive may have under Section 1542 or any similar statute or common law principle of any jurisdiction. Executive acknowledges that Executive may later discover facts different from, or in addition to, those Executive now knows or believes to be true with respect to the claims released in this Release, and agrees the release herein shall be and remain in effect in all respects as a complete release as to all matters released, notwithstanding any such different or additional facts.
Executive understands that this Release includes a release of claims arising under the Age Discrimination in Employment Act (ADEA). Executive understands and warrants that Executive has been given a period of twenty-one (21) days to review and consider this Release or forty-five (45) days if Executive’s termination is part of a group reduction in force. Executive further warrants that Executive understands that, with respect to the release of age discrimination claims only, Executive has a period of seven days (7) after execution of this Release to revoke the release of age discrimination claims by notice in writing to the Company.
EXECUTIVE ACKNOWLEDGES ALL OF THE FOLLOWING:
(i)I HAVE CAREFULLY READ AND HAVE VOLUNTARILY SIGNED THIS RELEASE;
(ii)I FULLY UNDERSTAND THE FINAL AND BINDING EFFECT OF THIS RELEASE, INCLUDING THE WAIVER OF CLAIMS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT;
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(iii)I ACKNOWLEDGE THAT THE CONSIDERATION PROVIDED TO ME IN EXCHANGE FOR THIS RELEASE IS IN ADDITION TO ANYTHING OF VALUE TO WHICH I AM ALREADY ENTITLED; AND
(iv)PRIOR TO SIGNING THIS RELEASE, I HAVE BEEN ADVISED OF MY RIGHT TO CONSULT, AND HAVE BEEN GIVEN ADEQUATE TIME TO REVIEW MY LEGAL RIGHTS WITH AN ATTORNEY OF MY CHOICE.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Release Agreement as of the date set forth above.
PagerDuty, Inc.
By:
Zachary Nelson
Zachary Nelson
Chair of the Compensation Committee of the Board
NOT TO BE SIGNED PRIOR TO THE TERMINATION DATE:
Agreed and Accepted:
___________________________________
John DiLullo
John DiLullo
Date:
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Exhibit 10.3
May 11, 2026
Mr. John DiLullo
Re: Sign-On Bonus Dear John,
Reference is hereby made to that certain Offer Letter by and between you and PagerDuty, Inc. (the “Company”), dated as of the date hereof (the “Offer Letter”). I am pleased to offer you the opportunity to receive a sign-on bonus in connection with the commencement of your employment as Chief Executive Officer of the Company on the terms set forth in your Offer Letter and this letter agreement (this “Agreement”). For the avoidance of doubt, all other terms and conditions of your employment shall be as set forth in your Offer Letter. Terms capitalized but not defined in this Agreement shall have the meanings set forth in your Offer Letter.
1.Sign-On Bonus. You shall be eligible to be paid a one-time sign-on bonus of $300,000 (subject to applicable withholding) in the first payroll processed after your Start Date (the “Sign-On Bonus”). The Sign-On Bonus will be deemed fully earned after you have successfully completed twelve (12) months of active employment with the Company (the “Retention Period”). The Sign-On Bonus is recoverable by the Company in the event you provide notice of resignation without Good Reason or are terminated by the Company for Cause (as “Good Reason” and “Cause” are defined in Section 5 of the Offer Letter, provided that “Cause” must also constitute “misconduct” as defined in Section 1256 of the California Unemployment Insurance Code to the extent required by California Business & Professions Code Section 16608 and California Labor Code Section 926) prior to the twelve (12)-month anniversary of your Start Date, in which case you will be required to repay the Applicable Portion (as defined below) of your Sign-On Bonus on or before your last day of work via certified check. By signing below, you authorize the Company to deduct the Applicable Portion owed to the Company from your pay (including from any payments of base salary, bonus or other amounts owed to you). For purposes of this Agreement, the “Applicable Portion” of your Sign-On Bonus is the product of (a) $300,000 and (b) a fraction, the numerator of which is the number of days remaining (i.e., not yet elapsed) in the Retention Period as of the date of your termination of employment, and the denominator of which is three hundred sixty-five (365). Notwithstanding any provision herein, you, or, in the event of your death, your estate or survivors, shall have no obligation to repay any portion of the Sign-On Bonus if your employment terminates due to your death or disability within the twelve (12) month anniversary of your Start Date.
2.Acknowledgements. You hereby acknowledge that you have been advised of the right to consult with an attorney of your choosing concerning this Agreement and have had a reasonable opportunity of not less than five (5) business days to seek and obtain such advice prior to executing this Agreement, and that you enter into this Agreement knowingly and voluntarily. Further, you and the Company acknowledge that, in accordance with applicable law, you could have elected to receive payment of the
Sign-On Bonus at the end of the Retention Period without any repayment obligation, in lieu of receiving the Sign-On Bonus on the terms set forth in Section 1.
3.No Interest Owed on Repayment. You and the Company acknowledge and agree that in the event you are required to repay any Applicable Portion of the Sign-On Bonus, the Applicable Portion shall not be subject to any interest accrual.
4.Miscellaneous. Section 6 (Section 409A), Section 7 (Section 280G), and Section 10 (Miscellaneous Provisions) of the Offer Letter are each hereby incorporated by reference and shall apply mutatis mutandis as if set forth herein.
To accept the terms of this Agreement, please sign and date this Agreement in the space provided below. A duplicate original is enclosed for your records. This Agreement, together with your Offer Letter (and such other agreements referenced therein), forms the complete and exclusive statement of your employment agreement with the Company. It supersedes any other agreements or promises made to you by anyone, whether oral or written. This Agreement may not be modified or amended except by a written agreement signed by you and an authorized member of the Board (other than you).
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
PagerDuty, Inc.
By: /s/ Zachary Nelson
Zachary Nelson, Chair of the Compensation Committee of the Board
Agreed and Accepted:
/s/ John DiLullo
John DiLullo
[Signature Page to Sign-On Bonus Agreement]
Exhibit 10.4
PagerDuty, Inc.
2019 Employee Stock Purchase Plan
Offering Document
Offering Document
Adopted by the Compensation Committee: March 18, 2026
(Effective for Offerings Commencing on and after June 16, 2026)
In this document, capitalized terms not otherwise defined will have the same definitions of such terms as in the PagerDuty, Inc. 2019 Employee Stock Purchase Plan.
1.Grant; Offering Date.
(a)The Board hereby authorizes a series of Offerings pursuant to the terms of this Offering document.
(b)Each Offering will consist of four Purchase Periods of approximately six months in duration ending on June 15 and December 15 each year. After an Offering commences, a new Offering will thereafter automatically begin approximately every six months thereafter over the term of the Plan and will be approximately 24 months in duration. Offerings will be concurrent. Except as provided below, a Purchase Date is the last day of a Purchase Period or of an Offering, as the case may be.
(c)Notwithstanding the foregoing: (i) if any Offering Date falls on a day that is not a Trading Day, then such Offering Date will instead fall on the next subsequent Trading Day, and (ii) if the last day of either a Purchase Period or an Offering (and therefore any Purchase Date) falls on a day that is not a Trading Day, then such last day of the Purchase Period or Offering (and therefore the Purchase Date) will instead fall on the immediately preceding Trading Day.
(d)Prior to the commencement of any Offering, the Board or Committee may change any or all terms of such Offering and any subsequent Offerings. The granting of Purchase Rights pursuant to each Offering hereunder will occur on each respective Offering Date unless (i) prior to such date the Board or Committee determines that such Offering will not occur, or (ii) no shares of Common Stock remain available, as of the Offering Date, for issuance under the Plan in connection with such Offering.
(e)Notwithstanding anything in this Section 1 to the contrary, if the Fair Market Value of a share of Common Stock on any Offering Date of an Offering (the “New Offering”) is less than or equal to the Fair Market Value of a share of Common Stock on the Offering Date for an ongoing Offering (the “Ongoing Offering”), then such Ongoing Offering shall terminate immediately following the purchase of shares of Common Stock on the Purchase Date immediately preceding the New Offering and Participants in the terminated Ongoing Offering automatically shall be enrolled in the New Offering. Thereafter, notwithstanding the provisions of Section 1(c) above, instead of a new Offering commencing pursuant to Section 1(c), a new Offering shall begin on the 6 month anniversary of the New Offering that commences pursuant to this Section 1(f) and every 6 months thereafter, and each such Offering shall end on the day prior to the 24-month anniversary of its Offering Date.
2.Eligible Employees.
(a)“Eligible Employee” means an Employee as of the applicable enrollment deadline who is either: (i) an employee of the Company; (ii) an employee of a Related Corporation incorporated in the United States; or (iii) an employee of a Related Corporation that is not incorporated in the United States but whose employees the Board or Committee has designated as eligible to participate in the Offering. Each Eligible Employee as of an Offering Date who has completed the necessary enrollment paperwork (including any enrollment form) by the applicable deadline, will be granted a Purchase Right on the Offering Date of such Offering. For purposes of this Offering document, enrollment, election, withdrawal, change or similar action is deemed to include an electronic or other automated enrollment procedure specified by the Company.
(b)Each person who first becomes an Eligible Employee during an Offering shall not be granted a Purchase Right under such ongoing Offering, but shall be eligible to participate in subsequent Offerings and shall be granted a Purchase Right under such subsequent Offering; provided, however, that as a condition to the grant of a Purchase Right under such subsequent Offering, the Eligible Employee must submit the necessary enrollment paperwork (including any enrollment form) required by the Company at least five business days (or such other period of time as determined by the Company and communicated to Participants) before the start of such Offering.
(c)Notwithstanding the foregoing, the following Employees will not be Eligible Employees or be granted Purchase Rights under an Offering:
(i)if the Board or the Committee so determines from time to time, Employees whose customary employment is 20 hours per week or less or five (5) months per calendar year or less;
(ii)five percent stockholders (including ownership through unexercised and/or unvested stock options) as described in Section 5(c) of the Plan; or
(iii)Employees in jurisdictions outside of the United States if, as of the Offering Date of the Offering, the grant of such Purchase Rights under this Offering document would not be in compliance with the applicable laws, regulations or requirements of any jurisdiction in which the Employee resides or is employed, as determined in the sole discretion of the Board.
3.Purchase Rights; Purchase Limits.
(a)Subject to the limitations herein and in the Plan, a Participant’s Purchase Right will permit the purchase of the number of shares of Common Stock purchasable with up to 15% of such Participant’s Earnings paid during the Offering, beginning as of the date such Participant first commences participation in that Offering; provided, however, that no Participant may have more than 15% of such Participant’s Earnings applied to purchase shares of Common Stock under all ongoing Offerings under the Plan and all other plans of the Company and Related Corporations that are intended to qualify as employee stock purchase plans under Section 423 of the Code. In the case of a payroll date that falls after the Purchase Date of one Purchase Period but prior to the first Trading Day of the immediately following Purchase Period, if applicable, Earnings from such payroll will be included in the new Purchase Period. In the case of a payroll date that falls after the last Purchase Date of an Offering but prior to the Offering Date of the next new Offering, Earnings from such payroll will be included in the new Offering (provided the Eligible Employee continues to participate in the new Offering).
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(b)For Offerings hereunder, “Earnings” means the cash compensation paid to a Participant, consisting of the Participant’s base salary or base wage rate, bonuses, commissions and overtime pay, including the value of amounts elected to be deferred by such Participant under any 401(k) plan or other deferred compensation program or arrangement established by the Company or a Related Corporation, but excluding all of the following: other cash remuneration paid directly to the Participant, including, without limitation, profit sharing contributions, the cost of employee benefits paid for by the Company or a Related Corporation, education or tuition reimbursements, imputed income (whether or not arising under any Company or Related Corporation group insurance or benefit program), traveling expenses, business expense reimbursements, moving expense reimbursements, housing and living allowances, income received, reported or otherwise recognized in connection with stock options and other equity awards, contributions made by the Company or a Related Corporation under any employee benefit plan, and other similar items of compensation.
(c)However, the maximum number of shares of Common Stock that a Participant may purchase on any Purchase Date in an Offering will be such number of shares as has a Fair Market Value (determined as of the Offering Date for such Offering) equal to (1) $25,000 multiplied by the number of calendar years in which the Purchase Right under such Offering has been outstanding at any time, minus (2) the Fair Market Value of any other shares of Common Stock (determined as of the relevant Offering Date with respect to such shares) that, for purposes of the limitation of Section 423(b)(8) of the Code, are attributed to any of such calendar years in which the Purchase Right has been outstanding. In all cases, this $25,000 limit will be determined in accordance with regulations applicable under Section 423(b)(8) of the Code. In particular, the amount in clause (2) will be determined based on (i) the number of shares previously purchased with respect to such calendar years pursuant to such Offering or any other Offering under the Plan, and pursuant to any other Company or Related Corporation plans intended to qualify as an employee stock purchase plan under Section 423 of the Code, and (ii) the number of shares subject to other Purchase Rights outstanding on the Offering Date for such Offering pursuant to the Plan and any other such Company or Related Corporation plan intended to qualify as an Employee Stock Purchase Plan.
(d)In addition, the maximum number of shares of Common Stock that may be purchased on any single Purchase Date by any one Participant is 2,500 shares.
(e)Notwithstanding the foregoing, in all cases, the maximum aggregate number of shares of Common Stock available to be purchased by all Participants under an Offering will be the number of shares of Common Stock remaining available under the Plan on the Offering Date, rounded down to the nearest whole share, taking into account the Purchase Rights granted or to be granted under all other contemporaneous Offerings under the Plan. If the aggregate number of shares of Common Stock to be purchased upon the exercise of all outstanding Purchase Rights on a single Purchase Date under all on-going Offerings would exceed the foregoing limit, the Board will make a pro rata allocation (based on each Participant’s accumulated Contributions) on the applicable Purchase Date of the shares available (as of the Offering Date) in a uniform and equitable manner.
(f)Any Contributions not applied to the purchase of shares of Common Stock as a result of the application of the limits set forth in this Section 3 will be refunded to the Participants at the end of the Offering without interest.
4.Purchase Price.
The purchase price of shares of Common Stock under an Offering will be the lesser of: (i) 85% of the Fair Market Value of such shares of Common Stock on the Offering Date, and (ii) 85%
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of the Fair Market Value of such shares of Common Stock on the applicable Purchase Date, in each case rounded up to the nearest whole cent per share.
5.Participation.
(a)An Eligible Employee’s election to participate in an Offering is effective on the Offering Date. An Eligible Employee must elect his or her Contribution rate on the enrollment form provided by the Company. The completed enrollment form must be delivered to the Company at least five business days prior to the Offering Date, unless a different time is set by the Company for all Eligible Employees with respect to a given Offering. Contribution rates must be expressed in whole percentages of Earnings, with a minimum percentage of 1% (except as otherwise provided herein) and a maximum percentage of 15%. Contributions may only be made through payroll deductions.
(b)The following provisions apply with respect to the Participant’s ability to make increases and decreases to Contribution levels during an Offering, to be effective for future Contributions during such Offering. Subject to the limitations in Section 5(d) below, a Participant may decrease (including a decrease to 0%) his or her Contribution level no more than four times in the aggregate during an Offering. The Participant must deliver an election form stating the new decreased Contribution level at least five business days (or such other period of time as determined by the Company and communicated to Participants) prior to the payroll date for which it is to be effective.
(c)If a Participant decreases such Participant’s Contribution level to 0% but does not withdraw from an Offering, the Participant’s accumulated Contributions will be used to purchase shares in accordance with Section 6 below. Such Participant will be withdrawn from the Plan effective as of the first day of the next Offering, unless such Participant completes and delivers an enrollment form to the Company electing the Participant’s Contribution level during the relevant enrollment period for the new Offering (or by a different time set by the Company for all Eligible Employees with respect to a given Offering).
(d)A Participant may not increase his or her Contribution level during an Offering.
(e)Subject to the limitations in Section 5(d) below, a Participant may decrease or increase his or her Contribution level to be effective for the next Offering by delivering an election form stating the new decreased or increased Contribution level at least five business days (or such other period of time as determined by the Company and communicated to Participants) prior to the Offering Date for such new Offering.
(f)Notwithstanding anything to the contrary in the Plan or this Offering document, a Participant shall not be permitted to submit an election form stating a new decreased or increased Contribution level if a Participant is aware of material nonpublic information about the Company or during a blackout period that applies to such Participant under the Company’s Insider Trading Policy. Any election form providing for such decrease or increase shall be void and have no effect.
(g)A Participant may withdraw from an Offering and receive a refund of his or her Contributions (reduced to the extent, if any, such Contributions have been used to acquire shares of Common Stock for the Participant on any prior Purchase Date) without interest, at any time prior to the end of the Offering, but excluding the five business day period immediately preceding a
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Purchase Date (or such other period of time determined by the Company and communicated to Participants), by delivering the required form of withdrawal notice. A Participant who has withdrawn from an Offering may not again participate in that Offering, but may participate in subsequent Offerings.
(h)Eligible Employees may not make an investment decision regarding participation in an Offering, including electing a Contribution level, until a registration statement covering the shares reserved under the Plan for that Offering has been filed by the Company and has become effective. The Company may establish procedures to enable the purposes of the Plan to be satisfied while complying with applicable securities laws.
(i)Once an Eligible Employee affirmatively enrolls in an Offering and authorizes Contributions, the Eligible Employee automatically will be enrolled for all subsequent Offerings that begin after the end of the Offering in which the Eligible Employee is a Participant until he or she elects to withdraw from an Offering pursuant to Section 5(c) above, is deemed to have withdrawn pursuant to Section 5(b) above, or otherwise terminates his or her participation in the Plan (including through termination of employment).
6.Purchases.
Subject to the limitations contained herein, on each Purchase Date, each Participant’s Contributions (without any increase for interest) will be applied to the purchase of whole shares of Common Stock, up to the maximum number of shares permitted under the Plan and the Offering. On a Purchase Date, each Participant’s purchases shall first be made under the Offering for which purchases are being made on such Purchase Date that results in stock being purchased for such Participant at the lowest price under all Offerings in which such Participant has been granted Purchase Rights and under which stock is then being purchased on such Purchase Date.
7.Notices and Agreements.
Any notices or agreements provided for in an Offering or the Plan will be given in writing, in a form provided by the Company (including documents delivered in electronic form, if authorized by the Committee). Unless specifically provided for in the Plan or this Offering, notices and agreements will be deemed effectively given upon receipt (including documents delivered in electronic form).
8.Exercise Contingent on Stockholder Approval.
The Purchase Rights granted under an Offering are subject to the approval of the Plan by the stockholders of the Company as required for the Plan to obtain treatment as an Employee Stock Purchase Plan.
9.Offering Subject to Plan.
Each Offering is subject to all the provisions of the Plan, and the provisions of the Plan are hereby made a part of the Offering. The Offering is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of an Offering and those of
5
the Plan (including interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan), the provisions of the Plan will control.
10.Changes to Ongoing Offerings.
Notwithstanding anything in this Offering document to the contrary, the Board and/or the Committee are entitled to: (i) establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, if applicable; (ii) permit Contributions in excess of the amount designated by a Participant to adjust for mistakes in the Company’s processing of properly completed Contribution elections; (iii) establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with that Participant’s Contributions; (iv) amend any outstanding Purchase Rights or clarify any ambiguities regarding the terms of any Offering to enable the Purchase Rights to qualify under and/or comply with Section 423 of the Code; and (v) establish other limitations or procedures as the Board and/or the Committee determines in its sole discretion advisable that are consistent with the Plan. The actions of the Board of Committee pursuant to this paragraph will not be considered to alter or impair the Purchase Rights granted under this Offering as they are part of the initial terms of each Purchase Period and the Purchase Rights granted under this Offering document.
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Exhibit 31.1
CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, John DiLullo, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of PagerDuty, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 28, 2026 | /s/ John DiLullo | |||||||
| John DiLullo | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
Exhibit 31.2
CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Owen Howard Wilson, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of PagerDuty, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 28, 2026 | /s/ Owen Howard Wilson | |||||||
| Owen Howard Wilson | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
Exhibit 32.1
CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, John DiLullo, the Chief Executive Officer of PagerDuty, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of PagerDuty, Inc. for the fiscal quarter ended April 30, 2026 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of PagerDuty, Inc.
Date: May 28, 2026 | /s/ John DiLullo | |||||||
| John DiLullo | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
I, Owen Howard Wilson, the Chief Financial Officer of PagerDuty, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of PagerDuty, Inc. for the fiscal quarter ended April 30, 2026 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of PagerDuty, Inc.
Date: May 28, 2026 | /s/ Owen Howard Wilson | |||||||
| Owen Howard Wilson | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||