← All companies ← PCTY Manual PDFS → ← PCTY Software PDFS →

PD, PagerDuty

Software asset-light Distress / turnaround

A software business, earning high margins on code once it is written.

Latest annual: FY2026 10-K

PD · PagerDuty

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2026

$493M

+5.4% YoY · 18% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $494M 5-yr avg $409M

Gross margin 85% 5-yr avg 83%

Operating margin 5.1% 5-yr avg −21.0%

ROIC 6% 5-yr avg −24%

Owner-earnings margin 25% 5-yr avg 13%

Free cash flow margin 25% 5-yr avg 13%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock.
What moves the needle: Operating margin has run around −33% through the cycle on a 84% gross margin, the operating line in the red even at its best — so the lever is whether the spending below the gross line can come down enough to clear a profit: revenue growth against the cost curve, and the cash runway until it does. Stock-based pay runs about 23% of sales, a real and recurring claim on owners that the GAAP margin understates. Read this kind of business on retention and the cost of growth. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median −24%, above 15% in 0 of 7 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

29% of revenue comes from outside the United States.

Revenue by geography, FY2026

United States71%$351M
International29%$142M

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2018–2026

realized figures from each filing · older years to the left

2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	2026’26	TTMTTMApr 2026
										Income statement
$80M	$118M	$166M	$214M	$281M	$371M	$431M	$467M	$493M	$494M	RevenueRevenue
84%	85%	85%	86%	83%	81%	82%	83%	85%	85%	Gross marginGross mgn
31%	34%	31%	29%	28%	27%	26%	22%	21%	20%	SG&A / revenueSG&A/rev
42%	33%	29%	30%	34%	36%	32%	30%	26%	25%	R&D / revenueR&D/rev
($38M)	($42M)	($56M)	($66M)	($102M)	($129M)	($96M)	($60M)	$6M	$25M	Operating incomeOp. inc.
−48.1%	−35.9%	−33.4%	−31.0%	−36.1%	−34.9%	−22.3%	−12.8%	1.2%	5.1%	Operating marginOp. mgn
($38M)	($41M)	($50M)	($69M)	($107M)	($128M)	($75M)	($43M)	$173M	$186M	Net incomeNet inc.
										Cash flow & returns
($12M)	($6M)	($173K)	$10M	($6M)	$17M	$72M	$118M	$115M	$128M	Operating cash flowOp. cash
$1M	$2M	$2M	$5M	$8M	$17M	$20M	$21M	$13M	$12M	DepreciationDeprec.
$7M	$14M	$21M	$30M	$23M	$18M	($142K)	$14M	($169M)	($160M)	Working capital & otherWC & other
$822K	$4M	$5M	$4M	$3M	$5M	$2M	$3M	$3M	$3M	CapexCapex
1.0%	3.2%	3.1%	1.9%	1.2%	1.3%	0.5%	0.6%	0.6%	0.7%	Capex / revenueCapex/rev
($13M)	($7M)	($3M)	$6M	($9M)	$12M	$70M	$115M	$112M	$125M	Owner earningsOwner earn.
−15.9%	−6.2%	−1.5%	2.8%	−3.4%	3.3%	16.2%	24.6%	22.7%	25.3%	Owner earnings marginOE mgn
($13M)	($9M)	($5M)	$6M	($9M)	$12M	$70M	$115M	$112M	$125M	Free cash flowFCF
−15.9%	−7.9%	−3.2%	2.8%	−3.4%	3.3%	16.2%	24.6%	22.7%	25.3%	Free cash flow marginFCF mgn
—	$0	$0	$50M	$160K	$66M	$24M	$0	$0	$0	AcquisitionsAcquis.
—	—	—	—	$0	$0	$50M	$100M	$135M	—	BuybacksBuybacks
—	—	-24%	-16%	-37%	-39%	-26%	-18%	1%	6%	ROICROIC
—	—	-16%	-19%	-40%	-53%	-44%	-33%	68%	86%	Return on equityROE
—	—	−16%	−19%	−40%	−53%	−44%	−33%	68%	86%	Retained to equityRetained/eq
										Balance sheet
$44M	$128M	$351M	$560M	$543M	$477M	$571M	$571M	$470M	$444M	Cash & investmentsCash+inv
—	$34M	$37M	$55M	$75M	$91M	$100M	$107M	$108M	$76M	ReceivablesReceiv.
—	$8M	$6M	$6M	$10M	$7M	$6M	$7M	$7M	$4M	Accounts payablePayables
—	$26M	$31M	$49M	$66M	$84M	$94M	$100M	$102M	$72M	Operating working capitalOper. WC
—	$173M	$405M	$638M	$645M	$600M	$703M	$712M	$612M	$559M	Current assetsCur. assets
—	$89M	$115M	$173M	$227M	$271M	$282M	$369M	$304M	$287M	Current liabilitiesCur. liab.
—	1.9×	3.5×	3.7×	2.8×	2.2×	2.5×	1.9×	2.0×	1.9×	Current ratioCurr. ratio
—	—	$0	$72M	$72M	$119M	$137M	$137M	$137M	$137M	GoodwillGoodwill
—	$197M	$435M	$795M	$806M	$818M	$925M	$927M	$991M	$937M	Total assetsAssets
—	—	$0	$304M	$300M	$296M	$490M	$485M	$421M	$421M	Total debtDebt
—	—	($351M)	($257M)	($243M)	($180M)	($82M)	($86M)	($49M)	($23M)	Net debt / (cash)Net debt
-54.6×	—	—	-6.7×	-18.8×	-23.8×	-14.8×	-6.5×	0.7×	2.9×	Interest coverageInt. cov.
($56M)	($69M)	$308M	$367M	$267M	$241M	$172M	$130M	$254M	$217M	Shareholders’ equityEquity
22.8%	16.2%	16.4%	20.2%	24.9%	29.6%	29.5%	27.0%	19.9%	18.2%	Stock comp / revenueSBC/rev
										Per share
20.0M	21.4M	65.5M	79.6M	84.5M	88.7M	92.3M	92.0M	93.0M	79.5M	Shares out (diluted)Shares
$3.98	$5.50	$2.54	$2.68	$3.33	$4.18	$4.66	$5.08	$5.30	$6.21	Revenue / shareRev/sh
$-1.91	$-1.90	$-0.77	$-0.87	$-1.27	$-1.45	$-0.81	$-0.46	$1.86	$2.34	EPS (diluted)EPS
$-0.63	$-0.34	$-0.04	$0.08	$-0.11	$0.14	$0.76	$1.25	$1.20	$1.57	Owner earnings / shareOE/sh
$-0.63	$-0.44	$-0.08	$0.08	$-0.11	$0.14	$0.76	$1.25	$1.20	$1.57	Free cash flow / shareFCF/sh
$0.04	$0.17	$0.08	$0.05	$0.04	$0.05	$0.02	$0.03	$0.03	$0.04	Cap. spending / shareCapex/sh
$-2.82	$-3.22	$4.70	$4.61	$3.16	$2.72	$1.86	$1.41	$2.73	$2.72	Book value / shareBVPS

The diluted share count moved ×3.06 into 2020 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.

Per-share growththe realized rate an owner's share compounded

	8-yr	5-yr
Revenue / share	+3.6%/yr	+14.6%/yr
Owner earnings / share	—	+73.7%/yr
Capital spending / share	−3.2%/yr	−9.0%/yr
Book value / share	—	−10.0%/yr

The record, charted

FY2018–2026

Each measure over its full record; the current point and the worst year marked.

Share count

93Mpeak FY2026

ROIC

1%low FY2023

Gross margin

85%low FY2023

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$112Mowner earningsvs.$173Mnet incomelow FY2018

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2021FY2026

Owner-earnings bridge

FY2022–FY2026cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2026 the business reported $173M of profit but $112M of owner earnings: $61M less than the profit line, taken out by capital spending and the timing of cash.

Reported net income$173M

Owner earnings$112M · 23% of revenue

	FY2026	FY2025	FY2024	FY2023	FY2022
Reported net income	$173M	($43M)	($75M)	($128M)	($107M)
Depreciation & amortizationnon-cash charge added back	+$13M	+$21M	+$20M	+$17M	+$8M
Stock-based compensationreal costnon-cash, but a real cost	+$98M	+$126M	+$127M	+$110M	+$70M
Working capital & othertiming of cash in and out, other non-cash items	−$169M	+$14M	−$142K	+$18M	+$23M
Cash from operations	$115M	$118M	$72M	$17M	($6M)
Capital expenditurecash put back in to keep running and to grow	−$3M	−$3M	−$2M	−$5M	−$3M
Owner earnings	$112M	$115M	$70M	$12M	($9M)
Owner-earnings marginowner earnings ÷ revenue	23%	25%	16%	3%	-3%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $98M), owner earnings is nearer $14M.

Much of fiscal 2026's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2026 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 0.7×

Does not cover its interest

Operating income $6M ÷ interest expense $9M

What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
How heavy is the debt, net of cash? +$49M

Net cash

Cash $237M + ST investments $232M − debt $421M

What this means
Cash and short-term investments exceed every dollar of debt by $49M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 47d

Tight

DSO 80 + DIO 0 − DPO 33 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash. (Little or no inventory, a services / asset-light model, so the inventory leg is ~0.)

Is it a good business?

Return on invested capital -24%

Below average through the cycle

7-yr median, range -39%–1%; 1% latest = NOPAT $6M ÷ invested capital $437M

Industry peers: median -15%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 7 years (it ran 1% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 23%

High, recently turned positive

latest $112M = operating cash $115M − maintenance capex $3M; positive each of the last 3 years, after an earlier loss stretch (9-yr median 3%)

Industry peers: median 3%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 23% of revenue this year, a 3% median across 9 years. Treating stock comp as the real expense it is (less $98M of SBC) leaves $14M.
Are earnings backed by cash? 0.66×

Mostly cash-backed

Cash from ops $115M ÷ net income $173M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 121%

Returned more than it generated

Dividends + buybacks $135M ÷ Owner Earnings $112M

What this means
The company returned more than it generated: against $112M of Owner Earnings, $135M (121%) went back to shareholders, $0 dividends, $135M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $98M stock comp, the real buyback was about $37M. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 0.22×

Harvesting

Capex $3M ÷ depreciation $13M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 1 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $493M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 2.01×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Near

Debt ≤ working capital · $421M vs $308M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (9-yr record) · 8 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth —

Earnings +33% over the record · —

What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.24/share (latest year $2.25), the averaged base the calculator's gate runs on, and book value is $3.29/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2018–2026

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 1 of 9

What this means
Lost money in 8 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 7 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin −39% → −11% (3-yr avg ends)

What this means
Through the cycle the operating margin widened — about −39% early to −11% lately, median −33% — pricing power intact or improving.
Reinvestment, incremental ROIC −4%

What this means
Reinvested capital came back at a negative incremental return over this window — the invested base grew while operating profit did not. The filings show where it went.
Worst year 2018 · −48.1% op. margin

What this means
Operations went underwater in 2018, understand why before trusting the good years.

Does AI threaten the moat?

Elevated contestability

The product is software or information, the very thing capable AI now produces more cheaply, so the moat is more contestable than the record alone implies.

In its own filing A competitive risk, new this year

Its FY2026 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“The availability of foundation models and agentic frameworks via public APIs and open-source releases may lower barriers to entry for new and niche competitors.”

AI has collapsed the cost of building a capable substitute for the very thing this business sells. When a credible alternative can be assembled for a fraction of the incumbent's price, it is pricing power that erodes first, not revenue tomorrow. The live question is whether the moat survives that, not whether it held in the past. Whether that question is answerable at all is yours to decide, against your own circle of competence.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Apr 30, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$559M

Cash & short-term investments$444M
Receivables$76M
Other current assets$39M

Current liabilities$287M

Accounts payable$4M
Other current liabilities$283M

Current ratio1.95×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.95×stricter: inventory excluded

Cash ratio1.55×strictest: cash alone against what's due

Working capital$272Mthe cushion left after near-term bills

Revenue, latest quarter vs. a year ago+1.0%the freshest read on whether the business is still growing

Current ratio, recent quarters2.1× → 1.9×

Deeper floors

Tangible book value$64Mequity stripped of goodwill & intangibles

Net current asset value($149M)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$437M$16M of it operating leases

Deferred revenue$243Mcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2018–2026

Over the record, the business generated $308M of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$30M · 10%
Buybacks$285M · 92%

Returned to owners$285M
101% of the owner earnings the business produced over the span, $0 as dividends and $285M as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span cash and short-term investments rose $400M.
Average price paid for buybacks$19.17
Across the years where the filing reports a share count, 5M shares were bought for $100M, about $19.17 each.
Net change in share count297.6%
The diluted count rose from 20M to 79M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2022	Ms. Tejada	$13.3M	−$1.5M	($9M)
2023	Ms. Tejada	$22.7M	$5.3M	$12M
2024	Ms. Tejada	$19.8M	$3.4M	$70M
2025	Ms. Tejada	$19.8M	$13.3M	$115M
2026	Ms. Tejada	$15.3M	$1.6M	$112M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
CEO pay ratio128:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$98M
The slice of the business handed to employees in shares this year, 20% of revenue, equal to 1675% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why PagerDuty is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2018–2026.

1 of the 3 tests turned up something to look into; the other 2 came back clean.

Look hereDid the share count rise anyway?297.6%
Diluted shares grew 297.6% over 2018–2026, even as the company spent $285M on buybacks. The repurchases were a treadmill: stock issued to staff outran them, so owners' slice still shrank. Read the buyback line beside this one, not on its own.

And these came back clean

Is it less profitable than it was?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Software

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
BBBlackBerry Limited	$549M	72%	0.1%	0%	3%
FROGJFrog	$532M	79%	-21.4%	-10%	14%
NABLN-able Inc.	$511M	83%	12.7%	3%	15%
INTAIntapp	$504M	67%	-9.8%	-23%	6%
PDPagerDuty	$493M	84%	-33.4%	-24%	3%
SPTSprout Social Inc	$458M	76%	-20.6%	-52%	2%
XPERXperi Inc. Common Stock	$448M	—	-29.1%	-19%	-7%
ALKTAlkami Technology Inc.	$444M	54%	-28.2%	-15%	-19%
Group median	—	76%	-21.0%	-17%	3%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what PagerDuty has delivered.

PagerDuty’s latest year runs above its own through-cycle margin — the reported figure may flatter a peak. So the tool opens on the through-cycle base, Graham’s averaging cutting both ways; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, PagerDuty earns about $14M on its 2.8% median owner-earnings margin. This year’s 22.7% margin runs above that; the reported figure may flatter a peak you'd be paying on. Normalize, below, values the price on that through-cycle figure rather than the latest year. It comes pre-checked here for that reason, the same rule that already normalizes a trough; clear it to price the year as filed.

Base Normalize · through-cycle ($14M) Net of stock comp (−$90M) Steady-state · maintenance capex ($126M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’22→’26+198%/yr

Owner-earnings growth · since FY2023+109%/yr

Owner-earnings yield—

P/E (3-yr earnings ’24–’26)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $125M on 77M shares outstanding, per the 10-Q cover, as of 2026-05-26; net cash $23M. The if-converted diluted count is 79M, 3% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base opens on the through-cycle figure (the latest year sits above the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. Capex ($3M) runs well above depreciation ($12M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $126M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh PD against another business →

The owners of PD: the meeting and the votes →

Cite: Owner Scorecard, "PagerDuty (PD), the owner's record," https://ownerscorecard.com/c/PD, data as of 2026-07-09.

Manual order: ← PCTY its page in the Manual PDFS →

Industry order: ← PCTY the Software chapter PDFS →