On this page of StockholderLetter.com we present the latest annual shareholder letter from PagerDuty, Inc. — ticker symbol PD. Reading current and past PD letters to shareholders can bring important insights into the investment thesis.

Dear PagerDuty Stockholders, Reflecting on fiscal year 2025, one imperative became indisputably clear: the need for enterprises to modernize their operations with AI and automation is more urgent than ever. Three major trends underscore this: the increasing complexity of technology, the rising impact of global outages, and the fact that every business is now a digital business. These forces are reshaping how organizations operate and compete, making reliable, intelligent operations platforms essential. PagerDuty s 16 years of leadership in digital operations give us a unique perspective and a strong foundation to capture the significant opportunity ahead of us. We estimate our total addressable market at $50 billion,1 spanning software and AI development, IT infrastructure and operations, customer service and support, and security operations, with around 87 million potential users globally. As organizations accelerate their adoption of AI and automation, the need for robust, trusted platforms like PagerDuty will only grow. This large and diverse market supports multiple winners, and PagerDuty is well-positioned as the leading enterprise-grade operations platform that customers use to execute their AI and automation strategies. Already today, nearly half of the Fortune 500 and about two-thirds of the Fortune 100 rely on PagerDuty as essential infrastructure. In fiscal year 2025, we made progress on our platform strategy, reinforcing our commitment to deliver lasting value to stockholders. Customers using more than one product embedded in PagerDuty s Operations Cloud platform drove 65 percent of total annual recurring revenue (ARR), up three percentage points from the year before and seven since fiscal year 2023. Our newer products like AIOps, Automation, Customer Service Ops, and our generative AI Assistant PagerDuty Advance, are driving a favorable shift in our revenue mix. Incident management now contributes 70 percent of ARR, down from 73 percent in the previous fiscal year, as customers expand their use of our platform. We also continued to build long-term, multi-product relationships in the enterprise sector. The number of customers spending more than $1 million annually increased to 72, up 24 percent compared to a year earlier, with 849 customers spending more than $100,000 annually, six percent higher than a year earlier. ARR from these larger customers grew 12 percent year-overyear, now representing 71 percent of total ARR. Overall, ARR grew nine percent year-over-year to $494 million, and we delivered 106 percent dollar-based net retention, with enterprise retention outpacing commercial by about 10 percentage points. Importantly, we delivered our third consecutive year of non-GAAP profitability, demonstrating the strength and durability of our business model. We achieved nine percent annual growth in both revenue and ARR while expanding our non-GAAP operating margin by nearly 500 basis points to 18 percent. With free cash flow margin expansion from 15 to 23 percent yearover-year, we see proof of our operational discipline and efficient growth strategy. Reflecting our confidence in our ability to scale efficiently, we raised our long-term non-GAAP operating margin target from 20 percent to 30 percent. Building on our proprietary business model and more than a decade of operations data, we continue to invest in AI-led innovation. Early in fiscal year 2026, we announced that we will add AI agents that are designed to work alongside human responders to intelligently identify, triage, and resolve operational issues beginning with our Spring 2025 release. We also announced adjustments to the packaging of our offering that allow more customers to experience the benefits of AI-driven operations. We reached a major milestone in our efforts to deliver resilience to the public sector with Federal Risk and Authorization Management Program (FedRAMP ) Low Authorization. We also expanded our generative AI solutions with PagerDuty Advance, a platform-wide assistant that prompts responders through critical communications steps when moments matter to contain and reduce the impact of incidents. Our AIOps intelligently detects, correlates events, and orchestrates critical work. Our platform reduces the time and human effort required to resolve and learn from major incidents, and address the root cause. 1 See Our Market Opportunity in Part I, Item I within PagerDuty s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 17, 2025.
Our success is validated by partners and industry experts. A Forrester Total Economic Impact study that we commissioned in 2024 found that customers using the PagerDuty Operations Cloud achieved 249 percent return on investment over three years with a payback period of less than 12 months. AWS leadership included PagerDuty in the annual flagship AWS re:Invent industry event keynote with 60,000 attendees,2 where we shared the latest PagerDuty innovation with a key industry audience.3 We continued to extend our leadership to position for the opportunities ahead. Over fiscal year 2025, we welcomed Jeff Hausman as Chief Product Development Officer to lead our Operations Cloud platform strategy and product innovation, Pritesh Parekh as our Chief Information Security Officer, and Rukmini Reddy as Senior Vice President of Engineering. Our Board leadership was augmented by former AWS, Splunk and Microsoft executive Teresa Carlson and Lattice CEO Sarah Franklin. On behalf of the Board of Directors and the entire PagerDuty team, thank you for your continued support and confidence in our company. Sincerely, Jennifer Tejada Chairperson and CEO 2 3 See Unlocking innovation: three key themes from AWS re:Invent 2024, AWS blog, Jan. 6, 2025 See PagerDuty teams up with AWS to enhance incident management with generative AI integrations, siliconAngle, Dec. 3, 2024
Dear Stockholder, We are pleased to invite you to attend the 2025 Annual Meeting of Stockholders (the Annual Meeting ) of PagerDuty, Inc. ( PagerDuty or the Company ), to be held on Thursday, June 26, 2025, at 2:00 p.m. Pacific Time. The Annual Meeting will be conducted virtually via live audio webcast. You will be able to vote and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/PD2025 (please have your notice or proxy card in hand when you visit the website). You will not be able to attend the Annual Meeting in person. The attached Notice of Annual Meeting of Stockholders and Proxy Statement contain details of the business to be conducted at the Annual Meeting. YOUR VOTE IS IMPORTANT. Whether or not you attend the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. Therefore, we urge you to promptly vote and submit your proxy via the Internet, by phone or by mail. On behalf of the Company's Board of Directors, thank you for your support of and interest in PagerDuty. Sincerely, Jennifer Tejada CEO and Chair of the Board of Directors
 • shareholder letter icon 5/27/2025 Letter Continued (Full PDF)
 • stockholder letter icon 5/2/2023 PD Stockholder Letter
 • stockholder letter icon 5/2/2024 PD Stockholder Letter
 • stockholder letter icon More "Information Technology Services" Category Stockholder Letters
 • Benford's Law Stocks icon PD Benford's Law Stock Score = 83


PD Shareholder/Stockholder Letter Transcript:



Dear PagerDuty Stockholders,
Reflecting on fiscal year 2025, one imperative became indisputably clear: the need for enterprises to modernize their
operations with AI and automation is more urgent than ever. Three major trends underscore this: the increasing complexity of
technology, the rising impact of global outages, and the fact that every business is now a digital business. These forces are
reshaping how organizations operate and compete, making reliable, intelligent operations platforms essential.
PagerDuty   s 16 years of leadership in digital operations give us a unique perspective and a strong foundation to capture the
significant opportunity ahead of us. We estimate our total addressable market at $50 billion,1 spanning software and AI
development, IT infrastructure and operations, customer service and support, and security operations, with around 87 million
potential users globally. As organizations accelerate their adoption of AI and automation, the need for robust, trusted
platforms like PagerDuty will only grow.
This large and diverse market supports multiple winners, and PagerDuty is well-positioned as the leading enterprise-grade
operations platform that customers use to execute their AI and automation strategies. Already today, nearly half of the
Fortune 500 and about two-thirds of the Fortune 100 rely on PagerDuty as essential infrastructure.
In fiscal year 2025, we made progress on our platform strategy, reinforcing our commitment to deliver lasting value to
stockholders. Customers using more than one product embedded in PagerDuty   s Operations Cloud platform drove 65
percent of total annual recurring revenue (ARR), up three percentage points from the year before and seven since fiscal year
2023. Our newer products like AIOps, Automation, Customer Service Ops, and our generative AI Assistant PagerDuty
Advance, are driving a favorable shift in our revenue mix. Incident management now contributes 70 percent of ARR, down
from 73 percent in the previous fiscal year, as customers expand their use of our platform.
We also continued to build long-term, multi-product relationships in the enterprise sector. The number of customers spending
more than $1 million annually increased to 72, up 24 percent compared to a year earlier, with 849 customers spending more
than $100,000 annually, six percent higher than a year earlier. ARR from these larger customers grew 12 percent year-overyear, now representing 71 percent of total ARR. Overall, ARR grew nine percent year-over-year to $494 million, and we
delivered 106 percent dollar-based net retention, with enterprise retention outpacing commercial by about 10 percentage
points.
Importantly, we delivered our third consecutive year of non-GAAP profitability, demonstrating the strength and durability of our
business model. We achieved nine percent annual growth in both revenue and ARR while expanding our non-GAAP
operating margin by nearly 500 basis points to 18 percent. With free cash flow margin expansion from 15 to 23 percent yearover-year, we see proof of our operational discipline and efficient growth strategy. Reflecting our confidence in our ability to
scale efficiently, we raised our long-term non-GAAP operating margin target from 20 percent to 30 percent.
Building on our proprietary business model and more than a decade of operations data, we continue to invest in AI-led
innovation. Early in fiscal year 2026, we announced that we will add AI agents that are designed to work alongside human
responders to intelligently identify, triage, and resolve operational issues beginning with our Spring 2025 release. We also
announced adjustments to the packaging of our offering that allow more customers to experience the benefits of AI-driven
operations. We reached a major milestone in our efforts to deliver resilience to the public sector with Federal Risk and
Authorization Management Program (FedRAMP   ) Low Authorization.
We also expanded our generative AI solutions with PagerDuty Advance, a platform-wide assistant that prompts responders
through critical communications steps when moments matter to contain and reduce the impact of incidents. Our AIOps
intelligently detects, correlates events, and orchestrates critical work. Our platform reduces the time and human effort
required to resolve and learn from major incidents, and address the root cause.
1
See    Our Market Opportunity    in Part I, Item I within PagerDuty   s Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 17, 2025.

Our success is validated by partners and industry experts. A Forrester Total Economic Impact study that we commissioned in
2024 found that customers using the PagerDuty Operations Cloud achieved 249 percent return on investment over three
years with a payback period of less than 12 months. AWS leadership included PagerDuty in the annual flagship AWS re:Invent
industry event keynote with 60,000 attendees,2 where we shared the latest PagerDuty innovation with a key industry
audience.3
We continued to extend our leadership to position for the opportunities ahead. Over fiscal year 2025, we welcomed Jeff
Hausman as Chief Product Development Officer to lead our Operations Cloud platform strategy and product innovation,
Pritesh Parekh as our Chief Information Security Officer, and Rukmini Reddy as Senior Vice President of Engineering. Our
Board leadership was augmented by former AWS, Splunk and Microsoft executive Teresa Carlson and Lattice CEO Sarah
Franklin.
On behalf of the Board of Directors and the entire PagerDuty team, thank you for your continued support and confidence in
our company.
Sincerely,
Jennifer Tejada
Chairperson and CEO
2
3
See    Unlocking innovation: three key themes from AWS re:Invent 2024,    AWS blog, Jan. 6, 2025
See    PagerDuty teams up with AWS to enhance incident management with generative AI integrations,    siliconAngle, Dec. 3, 2024

Dear Stockholder,
We are pleased to invite you to attend the 2025 Annual Meeting of Stockholders (the    Annual Meeting   ) of PagerDuty, Inc.
(   PagerDuty    or the    Company   ), to be held on Thursday, June 26, 2025, at 2:00 p.m. Pacific Time. The Annual Meeting will
be conducted virtually via live audio webcast. You will be able to vote and submit your questions during the meeting by
visiting www.virtualshareholdermeeting.com/PD2025 (please have your notice or proxy card in hand when you visit the
website). You will not be able to attend the Annual Meeting in person.
The attached Notice of Annual Meeting of Stockholders and Proxy Statement contain details of the business to be conducted
at the Annual Meeting.
YOUR VOTE IS IMPORTANT. Whether or not you attend the Annual Meeting, it is important that your shares be
represented and voted at the Annual Meeting. Therefore, we urge you to promptly vote and submit your proxy
via the Internet, by phone or by mail.
On behalf of the Company's Board of Directors, thank you for your support of and interest in PagerDuty.
Sincerely,
Jennifer Tejada
CEO and Chair of the Board of Directors



shareholder letter icon 5/27/2025 Letter Continued (Full PDF)
 

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