Exploring PagerDuty, Inc. (PD) Investor Profile: Who’s Buying and Why?

You're looking at PagerDuty, Inc. (PD) and wondering why this digital operations platform keeps showing up in institutional portfolios, right? The short answer is that the big money sees a clear path to profitable growth, despite the overall growth slowdown in the software sector. For the full fiscal year 2025, PagerDuty delivered $467.5 million in revenue, an 8.5% year-over-year increase, and expanded its non-GAAP operating income to $82.7 million, reflecting a healthy 17.7% margin-that's defintely not a small feat in this climate. So, who exactly is placing these big bets? Well, institutions hold a commanding stake of nearly 91% of the shares, with giants like Vanguard Group, Inc. and BlackRock, Inc. among the top owners, signaling a strong conviction in the company's mission-critical role in the cloud ecosystem. With Annual Recurring Revenue (ARR) hitting $494 million by the end of FY2025, the question isn't if the growth story is real, but how these key players plan to capitalize on the shift to AIOps (Artificial Intelligence for IT Operations) and automation. Let's dig into the 13F filings to see the precise strategy behind their collective conviction.

Who Invests in PagerDuty, Inc. (PD) and Why?

The investor profile for PagerDuty, Inc. (PD) is overwhelmingly dominated by institutional money, which is buying into the company's shift toward profitable growth and its strategic positioning in the mission-critical AI-driven operations space. The core investment thesis centers on the firm's strong free cash flow generation and the potential for its new Agentic Artificial Intelligence (AI) offerings to re-accelerate revenue growth from the 8.5% seen in fiscal year 2025.

You need to understand that PagerDuty, Inc. is not a stock driven by retail sentiment; it's a professional-grade holding where the smart money is betting on operational efficiency translating into higher multiples.

The Institutional Juggernaut: Who Holds the Bulk of PD?

The ownership structure of PagerDuty, Inc. is heavily skewed toward large financial institutions, which collectively hold nearly 97% of the outstanding shares. This high concentration means the stock's price movements are defintely more influenced by large-scale portfolio shifts-like index rebalancing or thematic fund flows-than by individual investor activity. Retail investors, while present, represent a small fraction of the total float, making them price-takers, not price-setters.

The biggest players are the passive and active mega-funds. Here's the quick math on who owns the largest stakes, based on recent filings (as of September 30, 2025):

• Vanguard Group Inc: A leader in passive investing, holding one of the largest positions, reflecting PagerDuty, Inc.'s inclusion in major index funds.
• BlackRock, Inc.: Another colossal asset manager, whose stake also largely stems from its vast array of index and exchange-traded funds (ETFs).
• ARK Investment Management LLC: A key active manager, whose focus on disruptive innovation makes PagerDuty, Inc.'s AI-driven Operations Cloud a core thematic holding.

Hedge funds, like RGM Capital, LLC, are also active, often taking tactical positions to capitalize on short-term catalysts or perceived undervaluation.

Investment Motivations: The Shift to Profitable Growth and AI

Investors are attracted to PagerDuty, Inc. for three core reasons: its mission-critical market position, its strong financial discipline, and its clear-cut AI-driven growth narrative. The company is a leader in digital operations management, essentially acting as the central nervous system for enterprise IT to manage critical incidents. This is not a discretionary IT spend; it's essential infrastructure.

The most compelling financial motivator for institutional holders is the company's demonstrated operational efficiency. For the full fiscal year 2025, PagerDuty, Inc. reported non-GAAP operating income of $82.7 million, representing a strong margin of 17.7%. This efficiency translated into a robust free cash flow of $108.4 million, which is a huge green flag for institutions looking for financial stability in a growth-oriented software company. The board even authorized a $150 million share repurchase program, underscoring their confidence in the underlying value and free cash flow generation.

Since PagerDuty, Inc. is a growth company, it does not pay a dividend. The investment is purely a total return play, betting on capital appreciation. The future growth story is anchored in the PagerDuty Operations Cloud and the new Agentic Artificial Intelligence (AI) solutions, which management believes will accelerate Annual Recurring Revenue (ARR) beyond the $494 million reported for FY2025.

Investor Strategies: Long-Term Holders vs. Tactical Plays

The dominant strategy among the largest investors is long-term holding, but there is a clear split between passive and active approaches.

Long-Term/Passive Strategy: This is the Vanguard and BlackRock model. They are holding PagerDuty, Inc. because it's a component of the Russell 2000 or various technology indices, and they maintain their position regardless of short-term volatility. Their goal is simply to track the market. This creates a stable base of ownership.

Growth/Thematic Strategy: Funds like ARK Invest are executing a thematic growth strategy, viewing PagerDuty, Inc. as a key enabler in the broader AI and automation revolution. They are betting on the company's ability to monetize its new AI features and expand its total addressable market (TAM), which is estimated to be around $50 billion.

Value/Activist Strategy: A third strategy, often seen among hedge funds, is a value-oriented or activist approach. With a market capitalization around $1.39 billion and a strong cash position of $570.8 million as of January 31, 2025, some investors see the company as undervalued, especially considering its non-GAAP profitability. Their play is to push for actions like the announced share buyback or even a potential sale of the company to realize the intrinsic value. For a deeper dive into the company's financial stability, you should read Breaking Down PagerDuty, Inc. (PD) Financial Health: Key Insights for Investors.

Institutional Ownership and Major Shareholders of PagerDuty, Inc. (PD)

If you're looking at PagerDuty, Inc. (PD), the first thing to grasp is that this is an institutional stock. A massive 92.97% of the company's shares are held by institutional investors, which means the stock's movements and the company's long-term strategy are defintely driven by the decisions of a few hundred major firms. This high concentration is a double-edged sword: it signals strong professional conviction in the business model, but it also creates volatility when a few big players decide to rebalance.

The total shares held by institutions is approximately 86.69 million as of the end of the third fiscal quarter of 2025, distributed among 265 institutional holders. That's a lot of smart money betting on the digital operations management space.

Top Institutional Investors: Who Holds the Keys?

The top three institutional holders in PagerDuty, Inc. are the usual suspects-the massive index and asset managers whose passive funds track the market, plus a few active growth-focused players. These firms don't just hold shares; they hold influence. The largest three alone control nearly a third of the total shares outstanding.

Here's the quick math on the largest holders based on their September 30, 2025, 13F filings:

You can see that Vanguard Group Inc., a behemoth in the passive investing world, is the largest single shareholder, holding over 12.59 million shares. This is typical for a growth-oriented tech stock that's part of major indexes. BlackRock, Inc. is right behind them, and then you have a more active manager like ARK Investment Management LLC, whose conviction in the growth story is clear from their substantial holding.

Recent Shifts: Are Institutions Buying or Selling?

The latest 13F filings show a mixed but net positive sentiment in the third quarter of the 2025 fiscal year. Institutional investors were net buyers, meaning the total shares acquired outweighed the total shares sold. Specifically, there were 126 institutions that increased their positions, while 112 decreased them.

Some of the largest movements tell a clearer story:

• Vanguard Group Inc. boosted its stake by a substantial 17.114%, adding over 1.84 million shares.
• BlackRock, Inc. also increased its holding, adding 204,084 shares, a modest increase of 2.529%.
• On the selling side, RGM Capital, LLC significantly cut its position by over 25.8%, offloading about 1.46 million shares.

This tells me that while the index funds (Vanguard, BlackRock) continue to accumulate due to market tracking, active managers are having a real debate about the valuation and near-term growth trajectory. The fact that a large active holder like RGM Capital is selling is a signal to watch, but still, the net flow was positive. For a deeper dive into the company's foundation, you should read PagerDuty, Inc. (PD): History, Ownership, Mission, How It Works & Makes Money.

The Impact of Concentrated Ownership on Strategy and Price

When institutions own over 90% of a company, they are the market. Their collective sentiment dictates the stock price, and their engagement can heavily influence corporate strategy. This is where the rubber meets the road for PagerDuty, Inc. (PD).

These large investors, especially the active ones like ARK, are keenly focused on growth and profitability. They play a critical role in two ways:

• Strategic Alignment: They pressure management to focus on high-margin, scalable growth. PagerDuty's recent push into Artificial Intelligence (AI) with the launch of its End-to-End AI Agent Suite is a direct response to the market's demand for efficiency and future-proofing in the software sector. 74% of executives now view AI as essential to their company's function, and institutional investors are demanding that PagerDuty capitalize on this trend.
• Stock Volatility: The buying and selling activity of just a few of these firms can move the share price dramatically. For example, if a large fund like RGM Capital liquidates a position of over a million shares, it puts real downward pressure on the stock.

What this estimate hides is the potential for activist investing. A high concentration of institutional capital means a coordinated push for change-like a spin-off, a sale, or a major shift in capital allocation-is much easier to orchestrate. You need to keep an eye on the 13D filings (Schedule 13D), which signal an investor intends to actively pursue a change in business strategy, as opposed to the passive 13G filings. Right now, the focus is on execution against the AI-driven growth plan.

Key Investors and Their Impact on PagerDuty, Inc. (PD)

The investor profile for PagerDuty, Inc. (PD) is dominated by institutional money, which holds an overwhelming majority of the stock. This means the company's stock movements and strategic direction are less about retail sentiment and more about the mandates and trading activity of a few large funds. Honestly, with institutional ownership nearing 97.26%, the big players are the market for PagerDuty, Inc. (PD).

The direct takeaway is that the core investment thesis is anchored by passive index funds, but the near-term volatility and strategic pressure come from a mix of active managers and large venture capital holders. You need to watch the 13F filings of the top three closely, as their collective stake is a massive block of shares.

The Big Three: Passive Giants and Active Movers

The largest shareholders are the indexing behemoths-Vanguard Group Inc. and BlackRock, Inc.-who hold shares primarily through their vast index-tracking funds. They are fundamentally long-term, passive holders. But the third major player, ARK Investment Management LLC, is an active growth fund that drives significant sentiment and trading volume. This creates an interesting tension between stability and aggressive growth speculation.

Here's the quick math on the top institutional stakes as of the Q3 2025 reporting period (ending September 30, 2025):

What this estimate hides is the influence of Bessemer Venture Partners VIII LP, a major insider shareholder with 15,527,226 shares, representing a 16.65% stake. This venture capital presence, alongside other founders and early investors, means a significant portion of the company's governance is influenced by early-stage, long-term growth-focused capital, not just public market funds.

Investor Influence: From Governance to Strategy

The influence of these investors maps directly to their style. Vanguard and BlackRock, as passive investors, focus on corporate governance-things like board composition, executive pay, and shareholder rights. They rarely push for a sale or a major operational overhaul, but they defintely vote on key proposals.

Active managers like ARK Investment Management LLC, on the other hand, are making a direct bet on PagerDuty, Inc.'s (PD) growth narrative, especially its push into Artificial Intelligence Operations (AIOps) and automation. Their continued buying or selling sends a strong signal to the market about the credibility of the growth story. When they buy, the market sees validation; when they sell, it signals caution about the Mission Statement, Vision, & Core Values of PagerDuty, Inc. (PD).

• Passive Funds (Vanguard, BlackRock): Provide price stability and focus on long-term governance.
• Active Funds (ARK): Drive volatility and validate the company's AI-centric product strategy.
• Insider/VC Funds (Bessemer): Exert strategic influence, often holding board seats to guide long-term vision.

Recent Notable Moves and Clear Actions

The most significant recent moves by investors relate to capital allocation and strategic direction. In July 2025, PagerDuty, Inc. (PD) stock surged because Reuters reported the company was exploring strategic options, including a potential sale, following acquisition interest. This is a classic investor-driven catalyst, suggesting a push to unlock shareholder value.

In response to both market conditions and shareholder demands for capital return, the company authorized a new share repurchase program. This program was increased to up to $200 million in the second quarter of fiscal year 2026 (ended July 31, 2025). This action directly benefits shareholders by reducing the outstanding share count and improving earnings per share (EPS) metrics, which is a key focus for institutional investors concerned with profitability.

ARK's trading activity is another key recent move. After selling 568,213 shares in Q2 2025, they reversed course and increased their position in Q3 2025, acquiring an additional 224,769 shares. This on-again, off-again trading pattern suggests a high-conviction but highly sensitive position, reacting quickly to quarterly results or product news, such as the launch of the company's end-to-end AI Agent Suite in October 2025. This is a clear signal that the AI narrative is what drives their money. If onboarding takes 14+ days, churn risk rises, and active investors notice immediately.

Next Step: You should track the upcoming Q3 Fiscal Year 2026 earnings call on November 25, 2025, for any updates on the $200 million buyback progress and the revenue impact of the new AI products.

Market Impact and Investor Sentiment

The investor sentiment toward PagerDuty, Inc. (PD) is best described as cautiously neutral, a shift driven by its pivot from aggressive growth to disciplined profitability. You see this in the analyst consensus: the stock currently holds a 'Hold' rating from a majority of Wall Street research firms, reflecting a wait-and-see approach. The market is rewarding the company's improved cost controls, but it's still skeptical about revenue reacceleration. Honesty, the market wants to see the top-line growth pick up again.

Institutional investors, the big money, are definitely committed. Institutions hold a commanding position, owning approximately 91.55% of the stock's float as of late 2025. This high level of institutional ownership signals that the core investment thesis-that PagerDuty, Inc. (PD) is a mission-critical software platform-remains intact. The largest shareholders include Vanguard Group Inc., ARK Investment Management LLC, and BlackRock, Inc., the kind of long-term players who value stability and a clear path to earnings.

Here's the quick math on the 2025 fiscal year outlook, which is the primary driver of current sentiment:

• Full FY 2025 Revenue Guidance: $464.5 million to $466.5 million.
• Full FY 2025 Non-GAAP EPS Guidance: $0.78 to $0.79 per diluted share.
• Annual Recurring Revenue (ARR) at Q3 FY25: $483 million.

That revenue growth rate, projected at about 8% year-over-year, is what keeps the sentiment from turning overtly positive, but the non-GAAP earnings per share (EPS) improvement is a strong signal of operational maturity.

Recent Market Reactions to Ownership and Earnings

The stock market has been very sensitive to PagerDuty, Inc. (PD)'s execution, especially around its quarterly earnings reports. For instance, following the Q2 Fiscal Year 2025 earnings release, the stock closed down 3.23%. This reaction was a classic case of the market punishing a revenue miss, even though the company delivered a beat on non-GAAP EPS. Investors are prioritizing growth in this sector, and a revenue miss, even a small one, triggers a sell-off.

Recent insider activity has also caught attention. In early 2025, both the CEO and CFO completed sizable stock transactions, reducing their ownership. While these are often pre-scheduled sales (Rule 10b5-1 plans), the market sometimes interprets executive selling as a lack of confidence, adding a minor headwind to the stock price. This is a common situation for high-growth tech firms, but it still requires a clear communication strategy from management to avoid investor jitters. You can dive deeper into the company's foundation and financial structure to understand the long-term view at PagerDuty, Inc. (PD): History, Ownership, Mission, How It Works & Makes Money.

Analyst Perspectives and Key Investor Impact

Analysts are generally constructive on PagerDuty, Inc. (PD)'s future, but they are factoring in the current macroeconomic slowdown that has affected enterprise software spending. The consensus 12-month price target as of November 2025 sits at $18.40, suggesting a modest upside of over 20% from the stock's recent trading range near $15/share. The high estimate is around $22.00, and the low is $16.00, showing a fairly tight range that suggests limited downside but also a cap on immediate explosive growth.

The key for analysts is the successful adoption of the company's newer, AI-powered offerings, like PagerDuty Advance. The belief is that this product expansion, coupled with the impressive non-GAAP operating margin of 21% achieved in Q3 FY 2025, will drive future growth. The major institutional holders like BlackRock, Inc. and Vanguard Group Inc. are essentially betting on management's ability to execute this efficiency-to-growth transition. They are patient capital, but they defintely expect to see a return on the company's strong free cash flow, which was $19 million in Q3 FY 2025.

The table below summarizes the current analyst landscape:

What this estimate hides is the risk of large deal conversions stalling, a challenge PagerDuty, Inc. (PD) noted in its Q3 report. That's the primary reason for the 'Hold' rating-you need to see those big enterprise deals close to justify a higher valuation multiple.