PagerDuty, Inc.PD

PagerDuty, Inc. Earnings Per Share Disclosure

10-KFiled Mar 12, 20262 min read
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) per share attributable to PagerDuty, Inc. common stockholders for the periods indicated (in thousands, except per share data):

Year ended January 31,
202620252024
Numerator:
Net income (loss) attributable to PagerDuty, Inc.$173,373 $(42,735)$(75,189)
Less: Adjustment attributable to redeemable non-controlling interest(481)11,725 6,568 
Net income (loss) attributable to PagerDuty, Inc. common stockholders$173,854 $(54,460)$(81,757)
Denominator:
Weighted average shares used in calculating net income (loss) per share:
Basic91,212 92,000 92,341 
Weighted average effect of potentially dilutive securities:
Stock options, RSUs, PSUs, and ESPP obligations1,783 — — 
Diluted92,995 92,000 92,341 
Net income (loss) per share attributable to PagerDuty, Inc. common stockholders:
Basic$1.91 $(0.59)$(0.89)
Diluted$1.87 $(0.59)$(0.89)

Since the Company was in a loss position for the years ended January 31, 2025 and 2024, basic net loss per share and diluted net loss per share were the same, as the inclusion of all potential common stock outstanding would have been anti-dilutive.
Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows (in thousands):
As of January 31,
202620252024
Shares subject to outstanding common stock awards7,726 12,097 12,829 
Restricted stock issued to acquire key personnel    — — 25 
Shares issuable pursuant to the ESPP333 103 105 
Total
8,059 12,200 12,959 

As described in Note 8, 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 January 31, 2026 and 2025, the conversion options of the 2028 Notes were out of money and as a result, there were no potentially dilutive shares related to the conversion of the 2028 Notes.

Additionally, as described in Note 8, Debt and Financing Arrangements, the Company entered into the 2028 Capped Calls, which were not included for purposes of calculating the number of diluted shares outstanding, as their effect would have been anti-dilutive.

Historical Timeline

Fiscal YearFiled
2026Mar 12, 2026Showing above
2025Mar 17, 2025

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

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