Despite top-line stagnation, the company achieved a 35.8% free cash flow margin in 2027Q1, though this is partially offset by significant stock-based compensation expenses that reached $32.9 million in 2025Q1.
| Cash from Operations | 128.47M | 114.86M | 117.89M | 71.97M | 16.98M | -6.02M | 10.1M | -173K | -5.61M | -11.84M |
| Operating CF Margin % | - | 23.32% | 25.22% | 16.71% | 4.58% | -2.14% | 4.73% | -0.1% | -4.76% | -14.86% |
| Operating CF Growth % | 31.72% | -2.57% | 63.8% | 323.88% | 382.01% | -159.64% | 5935.26% | 96.92% | 52.62% | - |
| Net Income | 187.46M | 173.85M | -54.46M | -81.76M | -129.22M | -107.45M | -68.9M | -50.34M | -40.74M | -38.15M |
| Depreciation & Amortization | 9.09M | 13.12M | 20.6M | 40.72M | 17.43M | 8.36M | 5.27M | 2.34M | 1.69M | 1.35M |
| Stock-Based Compensation | 64.05M | 97.8M | 126.21M | 127.15M | 109.91M | 70.03M | 43.23M | 27.2M | 19.08M | 18.15M |
| Deferred Taxes | -146.16M | -153.52M | 0 | 0 | -1.33M | 0 | 0 | 0 | 7.66M | 728K |
| Other Non-Cash Items | 49.05M | 25.4M | 34.15M | 12.35M | 27M | 24.96M | 25.7M | 7.45M | 4.5M | 3.91M |
| Working Capital Changes | -38.17M | -41.81M | -8.62M | -26.5M | -6.8M | -1.92M | 4.8M | 13.18M | 2.21M | 2.17M |
| Change in Receivables | 2.87M | -2.14M | -8.04M | -10.66M | -16.59M | -21.59M | -17.64M | -3.6M | -15.46M | -10.14M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | -6.91M | 1.56M | -983K | -2.6M |
| Change in Payables | -3.63M | -704K | 1.14M | -1.45M | -1.47M | 2.9M | 316K | -1.11M | 1.36M | 2.5M |
| Cash from Investing | -21.67M | -18.28M | -19.97M | -30.52M | -86.17M | 17.38M | -49.32M | -232.07M | -4.12M | -822K |
| Capital Expenditures | -3.46M | -2.94M | -9.48M | -2.16M | -8.47M | -6.81M | -4.85M | -5.17M | -4.12M | -822K |
| CapEx % of Revenue | 0.7% | 0.6% | 2.03% | 0.5% | 2.29% | 2.42% | 2.27% | 3.11% | 3.5% | 1.03% |
| Acquisitions | 0 | 0 | 0 | -24.07M | -66.26M | -160K | -49.66M | -17.95M | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -12.63M | -9.23M | 0 | -5.38M | -1.84M | 20.99M | 4.37M | 17.95M | -389K | 0 |
| Cash from Financing | -270.08M | -206.42M | -116.14M | 51.6M | -6.41M | -736K | 254.37M | 225.94M | 93.6M | 45.43M |
| Debt Issued (Net) | -57.5M | -57.5M | -403K | 167.16M | 0 | 0 | 242.49M | 0 | 0 | -176K |
| Equity Issued (Net) | -193.13M | -124.08M | -86.77M | -50M | 0 | 0 | -8.21M | 225.44M | 89.82M | 43.65M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -200.37M | -134.92M | -100.1M | -50M | -28.68M | -23.59M | -8.21M | -16K | 0 | 0 |
| Other Financing | -19.45M | -24.85M | -28.96M | -65.56M | -6.41M | -736K | 20.08M | 499K | 3.78M | 1.96M |
| Net Change in Cash | -163.34M | -109.85M | -18.34M | 92.65M | -75.77M | 10.62M | 215.14M | -6.3M | 83.87M | 32.77M |
| Free Cash Flow | 125M | 111.92M | 108.41M | 64.43M | 8.51M | -12.83M | 5.25M | -5.35M | -9.73M | -12.66M |
| FCF Margin % | 25.32% | 22.72% | 23.19% | 14.96% | 2.29% | -4.56% | 2.46% | -3.21% | -8.26% | -15.9% |
| FCF Growth % | 13.33% | 3.23% | 68.28% | 657.33% | 166.3% | -344.54% | 198.13% | 45.03% | 23.16% | - |
| FCF per Share | 1.57 | 1.20 | 1.18 | 0.70 | 0.10 | -0.15 | 0.07 | -0.08 | -0.13 | -0.21 |
| FCF Conversion (FCF/Net Income) | 0.67x | 0.66x | -2.76x | -0.88x | -0.13x | 0.06x | -0.15x | 0.00x | 0.14x | 0.31x |
| Interest Paid | 6.4M | 0 | 6.79M | 2.97M | 3.59M | 1.8M | 4K | 0 | 0 | 0 |
| Taxes Paid | 1.87M | 0 | 813K | 908K | 168K | 324K | 1.86M | 0 | 0 | 0 |
Top-line growth stagnation
As reported in financial statements, PagerDuty exhibits a persistent disconnect between GAAP net income and operating cash flow, with the OCF/NI ratio fluctuating wildly from -4.28 in 2026Q1 to 8.38 in 2027Q1, indicating that headline earnings are poor proxies for actual cash generation.
The extreme volatility in the conversion ratio suggests that non-cash items and accounting adjustments, rather than core operational performance, drive the bottom line. Investors should interpret the positive cash flow as a function of working capital management and non-cash expenses rather than genuine operational profitability.
Based on recent SEC filings, PagerDuty has maintained a consistent free cash flow margin, peaking at 35.8% in 2027Q1, which suggests that the company is successfully converting its subscription revenue into liquidity despite the broader deceleration in top-line growth observed across the business.
While the FCF margin appears robust, the reliance on non-operating gains to bolster net income warrants caution regarding the sustainability of these margins. The trend indicates that the company is prioritizing cash preservation over aggressive reinvestment, likely in response to the cooling demand environment.
According to historical data, PagerDuty maintains a low capital intensity, with CapEx as a percentage of revenue declining from 2.3% in 2024Q4 to 0.8% in 2027Q1, reflecting a business model that requires minimal physical infrastructure investment to support its cloud-based incident response platform.
This low capital intensity is a structural advantage that allows the company to direct cash toward sales and marketing or share repurchases. However, investors should monitor whether this reduction in CapEx reflects a strategic choice to limit innovation spending or simply the inherent scalability of the software architecture.
As evidenced by recent financial disclosures, PagerDuty has utilized its cash reserves to fund significant share repurchases, including $65.5 million in 2027Q1, which appears to be a primary mechanism for management to return value to shareholders amidst slowing organic growth and limited acquisition opportunities.
The decision to prioritize buybacks over large-scale M&A suggests that management may lack high-conviction internal investment opportunities or is attempting to offset the dilutive impact of stock-based compensation. This capital allocation strategy warrants further investigation into whether it signals a lack of long-term growth catalysts.
Based on reported figures, PagerDuty consistently issues significant stock-based compensation, reaching $32.9 million in 2025Q1, which effectively masks the true cash cost of talent and complicates the assessment of the company's underlying operational burn rate and long-term shareholder dilution.
When adjusting for these non-cash expenses, the company's actual cash-based profitability appears significantly lower than headline figures suggest. This practice necessitates a careful look at the true economic cost of operations, as the reliance on equity-based incentives may be inflating the perceived cash flow health.
Quick answers to the most common questions about buying PD stock.
PagerDuty, Inc. (PD) generated $114.9M in net cash from operating activities in 2026. This reflects the cash generated directly from core business operations.
PagerDuty, Inc. (PD) generated $111.9M in free cash flow in 2026. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
PagerDuty, Inc. (PD) spent $2.9M on capital expenditures in 2026. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2026, PagerDuty, Inc. (PD) spent $134.9M on share repurchases. This shows the company's commitment to returning capital to its equity investors.