Why PagerDuty (PD) Shares Are Trading Lower Today

What Happened?

Shares of IT incident response platform PagerDuty (NYSE:PD) fell 11.2% in the afternoon session after the company reported underwhelming first-quarter 2025 results: its full-year revenue guidance was lowered and came in below expectations. The company's EPS guidance for next quarter also fell short of Wall Street's estimates, reflecting a more cautious outlook on enterprise spending. 

On the other hand, PagerDuty recorded strong growth in customers during the quarter and its full-year EPS guidance trumped Wall Street's estimates. Still, this was a weaker quarter.

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What The Market Is Telling Us

PagerDuty’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. But moves this big are rare even for PagerDuty and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock gained 18.8% on the news that the company put up impressive fourth quarter 2024 results: PagerDuty's strong growth in customers allowed it to beat analysts' revenue, EPS, and adjusted operating income expectations. 

The only soft spot was revenue guidance for the year (2025), which came in just a bit below expectations. PagerDuty expected revenue growth of 7%-8% for the full year, a slight slowdown from 2024's 8.5% gain. 

Still, the company's ability to grow sales helped push its non-GAAP operating margin up during the quarter, nearly doubling from the previous year. This improvement contributed to the earnings beat. And given its strong full EPS guidance, it's clear the company was staying focused on profitability. Overall, this was a solid quarter.

PagerDuty is down 20.6% since the beginning of the year, and at $14.29 per share, it is trading 37.7% below its 52-week high of $22.93 from June 2024. Investors who bought $1,000 worth of PagerDuty’s shares 5 years ago would now be looking at an investment worth $510.06.

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