PagerDuty Still Has Lots of Upside for Investors

PagerDuty has a mission-critical product position in incident response, AIOps, automation, and digital-operations resilience. Meanwhile, PagerDuty’s customer base includes over 60% of the Fortune 100 and almost 50% of the Fortune 500.

PagerDuty continues to invest a very high 26% of its sales on research to position itself as the market leader in innovation and technology. That includes adding and integrating AI into its products and services.

PAGERDUTY INC. (New York symbol PD; pagerduty.com) operates a platform that collects real-time data from software systems and devices and then notifies its IT customers of incidents that could harm operations.

PagerDuty’s platform sits on top of a company’s technology systems, taking in data. As it receives the data, it then uses analytics and artificial intelligence (AI) to “learn on the go” and prevent adverse events from recurring. The company’s software platform aims to help clients take action in real time to save lost revenue and retain their customers while limiting damage to their brands and reputations.

Investors continue to worry that new AI tools will disrupt PagerDuty’s business model.

However, PagerDuty still has several advantages. Those include its more than 10 years at monitoring data for its clients, information that new AI chatbots can’t access. As a result, its own AI tools will likely react more quickly to any cyberattacks or other threats. The company has also shifted to multi-year contracts, which helps cut risk.
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PagerDuty’s high R&D spending helps it stay ahead of its rivals

For the three months ended April 30, 2026, revenue rose 1.0%, to $121.0 million from $119.8 million a year earlier. Sales were higher due to the addition of new customers. As well, many of the company’s existing customers increased their spending. Excluding one-time items, PagerDuty made $0.33 a share. That was up 32.0% from $0.25. The latest earnings beat the consensus estimate of $0.24 by a wide margin.

On April 30, 2026, the company had 15,380 paying customers, up 0.9% from 15,247 a year ago. Note—the number of customers contributing annual recurring revenue (ARR) over $100,000 was 860, up 1.4% from a year ago.

Meanwhile, PagerDuty’s customer base includes over 60% of the Fortune 100 and almost 50% of the Fortune 500. Recent customer wins and project expansions included The Boston Consulting Group, Coreweave, The Gap, Inc., General Motors Company, LightSpun, Palo Alto Networks, and Vodafone Group plc.

The company continues to invest a very high 26% of its sales on research to position itself as the market leader in innovation and technology. That includes adding and integrating AI into its products and services. While research spending hurts current earnings, it creates a hidden asset that helps PagerDuty compete in a fast-growing, rapidly changing and competitive industry.

PagerDuty has growth ahead as businesses—from major corporations to small firms—place more and more emphasis on dealing with customers digitally. The company also has lots of room for expansion internationally. It now generates only 24% of its revenue outside of the U.S.

To top it off, the business could conceivably be an attractive takeover candidate for any number of major tech firms that want to move into its growth markets.

Recommendation in Power Growth Investor: PagerDuty is still a buy for patient investors seeking long-term gains.

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Scott Clayton

Scott is an associate editor at TSI Network. He is the lead reporter and analyst for Dividend Advisor, Power Growth Investor and Canadian Wealth Advisor and a member of the Investment Planning Committee. Scott began his investment and financial career working with Pat McKeough at The Investment Reporter in the 1980s. Subsequently, he worked at the Financial Post Corporation Service for 10 years. He joined TSI Network in 1998. He is a Bachelor of Economics graduate of York University, and he also has an M.B.A. from the Schulich School of Business.

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