PagerDuty Inc. (PD) saw its shares tumble 5.59% in after-hours trading on Thursday, following the release of its first-quarter fiscal 2026 financial results and updated full-year guidance. The cloud computing company beat earnings expectations for the quarter but lowered its revenue forecast for the year, sparking concerns among investors about its growth trajectory.

For the first quarter ended April 30, PagerDuty reported non-GAAP earnings of $0.24 per diluted share, surpassing the FactSet analyst consensus of $0.19 and showing improvement from $0.17 a year earlier. Revenue rose to $119.8 million, slightly above the expected $119.1 million and up from $111.2 million in the same quarter last year.

Despite the strong quarterly performance, PagerDuty's outlook for the full fiscal year 2026 raised eyebrows. The company reduced its revenue guidance to a range of $493 million to $499 million, down from the previous forecast of $500 million to $507 million. This adjustment falls short of analysts' expectations of $503.7 million. However, PagerDuty did raise its full-year non-GAAP earnings per share guidance to between $0.95 and $1.00, up from the previous range of $0.90 to $0.95. The market's negative reaction suggests that investors are more concerned about the company's top-line growth prospects than its improving profitability.