PagerDuty Announces First Quarter Fiscal 2025 Financial Results
First quarter revenue increased 8% year over year to
First quarter GAAP operating loss of
Announces
“PagerDuty delivered a solid first quarter with annual recurring revenue growth stabilizing at 10% for the second consecutive quarter, and non-GAAP operating margin four percentage points above the range,” said
“We believe that our business is well positioned for growth and the continuation of meaningful free cash flow,” said
First Quarter Fiscal 2025 Financial Highlights
-
Revenue was
$111.2 million , an increase of 7.7% year over year. -
GAAP operating loss was
$21.7 million ; GAAP operating margin of negative 19.5%. -
Non-GAAP operating income was
$15.3 million ; non-GAAP operating margin of 13.8%. -
GAAP net loss per share attributable to
PagerDuty, Inc. common stockholders was$0.26 . -
Non-GAAP net income per diluted share attributable to
PagerDuty, Inc. common stockholders was$0.17 . -
Operating cash flow was
$28.6 million , with free cash flow of$27.1 million . -
Cash, cash equivalents and current investments were
$592.8 million as ofApril 30, 2024 .
The section titled “Non-GAAP Financial Measures” below contains a description of the non-GAAP financial measures and reconciliations between historical GAAP and non-GAAP information.
First Quarter and Recent Highlights
-
Customers with annual recurring revenue over
$100,000 grew 6% to 811 as ofApril 30, 2024 , compared to 764 a year ago. -
Dollar-based net retention rate of 106% as of
April 30, 2024 , compared to 116% a year ago. -
Total free and paid customers of more than 29,000 as of
April 30, 2024 representing approximately 18% growth year over year. -
Total paid customers of 15,120 as of
April 30, 2024 , compared to 15,089 a year ago. -
Remaining performance obligations were
$388.0 million as ofApril 30, 2024 . Of this amount, the Company expects to recognize revenue of approximately$273.4 million , or 70%, over the next 12 months with the balance to be recognized as revenue thereafter.1 -
Lands and expands include: Cisco Systems, DataDog, Equinix, Eventbrite, PriceSmart, Telefonica,
Veterans Affairs /VA and ZScaler - Unveiled advanced AI and automation enhancements to accelerate the resolution of operational issues and increase revenue
- Expanded PagerDuty’s Incident Management product with a new enterprise offering
-
Announced
Eduardo Crespo as Vice President of EMEA - Published PagerDuty’s Fourth Annual Impact Report
-
Approved for
Veterans Affairs Authority to Operate and advanced to “In PMO Review” status on the FedRAMP marketplace. -
Showcased PagerDuty customers -
New York Stock Exchange and Ryanair in Executive Spotlight series
1Beginning in the first quarter of fiscal 2025, the Company now includes contracts with an original term of less than 12 months in this disclosure which comprised |
Share Repurchase Program Authorization
In
Financial Outlook
For the second quarter of fiscal 2025,
-
Total revenue of
$115.5 million -$117.5 million , representing a growth rate of 7% - 9% year over year -
Non-GAAP net income per diluted share attributable to
PagerDuty, Inc. common stockholders of$0.16 -$0.17 assuming approximately 97 million diluted shares and a non-GAAP tax rate of 23%.
For the full fiscal year 2025,
-
Total revenue of
$471.0 million -$477.0 million , representing a growth rate of 9% - 11% year over year -
Non-GAAP net income per diluted share attributable to
PagerDuty, Inc. common stockholders of$0.66 -$0.71 assuming approximately 97 million diluted shares and a non-GAAP tax rate of 23%.
These statements are forward-looking and actual results may differ materially. Please refer to the Forward-Looking Statements section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
Conference Call Information:
Supplemental Financial and Other Information:
Supplemental financial and other information can be accessed through PagerDuty’s investor relations website at investor.pagerduty.com.
Non-GAAP Financial Measures:
This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss) attributable to
The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in PagerDuty’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by PagerDuty’s management about which expenses and income are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each historical non-GAAP financial measure to the most directly comparable financial measure presented in accordance with GAAP.
Specifically,
Stock-based Compensation:
Employer Taxes Related to Employee Stock Transactions:
Amortization of Acquired Intangible Assets:
Acquisition-Related Expenses:
Amortization of Debt Issuance Costs: The imputed interest rates of the Convertible Senior Notes (the "Notes") was approximately 1.91% for the 2025 Notes and 2.13% for the 2028 Notes. This is a result of the debt issuance costs, which reduce the carrying value of the convertible debt instruments. The debt issuance costs are amortized as interest expense. The expense for the amortization of the debt issuance costs is a non-cash item, and we believe the exclusion of this interest expense will provide for a more useful comparison of our operational performance in different periods.
Restructuring Costs:
Gains (or losses) on partial extinguishment of convertible senior notes:
Adjustment Attributable to Redeemable Non-Controlling Interest:
Income Tax Effects and Adjustments: Based on
There are a number of limitations related to the use of free cash flow as compared to net cash provided by (used in) operating activities, including that free cash flow includes capital expenditures, the benefits of which are realized in periods subsequent to those when expenditures are made.
Please see the reconciliation tables at the end of this release for the reconciliation of GAAP and non-GAAP results.
Forward-Looking Statements:
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our future financial performance and outlook and market positioning. Words such as “expect,” “extend,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “accelerate,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks and other factors detailed in our Annual Report on Form 10-K/A filed with the
Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
About
|
|||||||
Condensed Consolidated Statements of Operations |
|||||||
(in thousands, except per share data) |
|||||||
(unaudited) |
|||||||
|
Three Months Ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Revenue |
$ |
111,172 |
|
|
$ |
103,246 |
|
Cost of revenue(1) |
|
19,343 |
|
|
|
17,936 |
|
Gross profit |
|
91,829 |
|
|
|
85,310 |
|
Operating expenses: |
|
|
|
||||
Research and development(1) |
|
37,523 |
|
|
|
33,508 |
|
Sales and marketing(1) |
|
48,499 |
|
|
|
43,801 |
|
General and administrative(1) |
|
27,540 |
|
|
|
23,801 |
|
Total operating expenses |
|
113,562 |
|
|
|
101,110 |
|
Loss from operations |
|
(21,733 |
) |
|
|
(15,800 |
) |
Interest income |
|
6,980 |
|
|
|
4,203 |
|
Interest expense |
|
(2,148 |
) |
|
|
(1,334 |
) |
Other expense, net |
|
(251 |
) |
|
|
(13 |
) |
Loss before (provision for) benefit from income taxes |
|
(17,152 |
) |
|
|
(12,944 |
) |
(Provision for) benefit from income taxes |
|
(193 |
) |
|
|
106 |
|
Net loss |
$ |
(17,345 |
) |
|
$ |
(12,838 |
) |
Net loss attributable to redeemable non-controlling interest |
|
(206 |
) |
|
|
(620 |
) |
Net loss attributable to |
$ |
(17,139 |
) |
|
$ |
(12,218 |
) |
Adjustment attributable to redeemable non-controlling interest |
|
6,917 |
|
|
|
— |
|
Net loss attributable to |
$ |
(24,056 |
) |
|
$ |
(12,218 |
) |
Net loss per share, basic and diluted, attributable to |
$ |
(0.26 |
) |
|
$ |
(0.13 |
) |
Weighted average shares used in calculating net loss per share, basic and diluted |
|
92,876 |
|
|
|
91,522 |
|
(1) Includes stock-based compensation expense as follows: |
|||||||
|
Three Months Ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Cost of revenue |
$ |
1,756 |
|
$ |
1,876 |
||
Research and development |
|
11,222 |
|
|
|
10,101 |
|
Sales and marketing |
|
7,947 |
|
|
|
5,951 |
|
General and administrative |
|
12,015 |
|
|
|
9,617 |
|
Total |
$ |
32,940 |
|
|
$ |
27,545 |
|
|
|||||||
Condensed Consolidated Balance Sheets |
|||||||
(in thousands) |
|||||||
(unaudited) |
|||||||
|
As of |
|
As of |
||||
|
|
|
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
382,541 |
|
|
$ |
363,011 |
|
Investments |
|
210,242 |
|
|
|
208,178 |
|
Accounts receivable, net of allowance for credit losses of |
|
77,536 |
|
|
|
100,413 |
|
Deferred contract costs, current |
|
19,612 |
|
|
|
19,502 |
|
Prepaid expenses and other current assets |
|
17,045 |
|
|
|
12,094 |
|
Total current assets |
|
706,976 |
|
|
|
703,198 |
|
Property and equipment, net |
|
17,400 |
|
|
|
17,632 |
|
Deferred contract costs, non-current |
|
24,532 |
|
|
|
25,118 |
|
Lease right-of-use assets |
|
2,943 |
|
|
|
3,789 |
|
|
|
137,401 |
|
|
|
137,401 |
|
Intangible assets, net |
|
29,467 |
|
|
|
32,616 |
|
Other assets |
|
5,324 |
|
|
|
5,552 |
|
Total assets |
$ |
924,043 |
|
|
$ |
925,306 |
|
Liabilities, redeemable non-controlling interest, and stockholders’ equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
6,558 |
|
|
$ |
6,242 |
|
Accrued expenses and other current liabilities |
|
12,893 |
|
|
|
15,472 |
|
Accrued compensation |
|
28,609 |
|
|
|
30,239 |
|
Deferred revenue, current |
|
219,571 |
|
|
|
223,522 |
|
Lease liabilities, current |
|
5,498 |
|
|
|
6,180 |
|
Total current liabilities |
|
273,129 |
|
|
|
281,655 |
|
Convertible senior notes, net |
|
448,667 |
|
|
|
448,030 |
|
Deferred revenue, non-current |
|
4,022 |
|
|
|
4,639 |
|
Lease liabilities, non-current |
|
5,979 |
|
|
|
6,809 |
|
Other liabilities |
|
4,209 |
|
|
|
5,280 |
|
Total liabilities |
|
736,006 |
|
|
|
746,413 |
|
Redeemable non-controlling interest |
|
14,004 |
|
|
|
7,293 |
|
Stockholders’ equity: |
|
|
|
||||
Common stock |
|
— |
|
|
|
— |
|
Additional paid-in-capital |
|
794,842 |
|
|
|
774,768 |
|
Accumulated other comprehensive loss |
|
(1,235 |
) |
|
|
(733 |
) |
Accumulated deficit |
|
(569,574 |
) |
|
|
(552,435 |
) |
|
|
(50,000 |
) |
|
|
(50,000 |
) |
Total stockholders’ equity |
|
174,033 |
|
|
|
171,600 |
|
Total liabilities, redeemable non-controlling interest, and stockholders’ equity |
$ |
924,043 |
|
|
$ |
925,306 |
|
|
|||||||
Condensed Consolidated Statements of Cash Flows |
|||||||
(in thousands) (unaudited) |
|||||||
|
Three Months Ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities |
|
|
|
||||
Net loss attributable to |
$ |
(24,056 |
) |
|
$ |
(12,218 |
) |
Net loss and adjustment attributable to redeemable non-controlling interest |
|
6,711 |
|
|
|
(620 |
) |
Net loss |
|
(17,345 |
) |
|
|
(12,838 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
5,292 |
|
|
|
4,725 |
|
Amortization of deferred contract costs |
|
5,279 |
|
|
|
4,990 |
|
Amortization of debt issuance costs |
|
608 |
|
|
|
455 |
|
Stock-based compensation |
|
32,940 |
|
|
|
27,545 |
|
Non-cash lease expense |
|
846 |
|
|
|
1,176 |
|
Other |
|
(1,302 |
) |
|
|
(852 |
) |
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
22,716 |
|
|
|
30,003 |
|
Deferred contract costs |
|
(4,805 |
) |
|
|
(3,372 |
) |
Prepaid expenses and other assets |
|
(4,813 |
) |
|
|
(2,207 |
) |
Accounts payable |
|
268 |
|
|
|
(1,206 |
) |
Accrued expenses and other liabilities |
|
(3,435 |
) |
|
|
(244 |
) |
Accrued compensation |
|
(1,667 |
) |
|
|
(17,286 |
) |
Deferred revenue |
|
(4,423 |
) |
|
|
(7,246 |
) |
Lease liabilities |
|
(1,512 |
) |
|
|
(1,491 |
) |
Net cash provided by operating activities |
|
28,647 |
|
|
|
22,152 |
|
Cash flows from investing activities |
|
|
|
||||
Purchases of property and equipment |
|
(457 |
) |
|
|
(235 |
) |
Capitalization of internal-use software costs |
|
(1,092 |
) |
|
|
(1,072 |
) |
Purchases of available-for-sale investments |
|
(50,065 |
) |
|
|
(39,085 |
) |
Proceeds from maturities of available-for-sale investments |
|
46,556 |
|
|
|
48,955 |
|
Proceeds from sales of available-for-sale investments |
|
2,237 |
|
|
|
— |
|
Net cash (used in) provided by investing activities |
|
(2,821 |
) |
|
|
8,563 |
|
Cash flows from financing activities |
|
|
|
||||
Proceeds from issuance of common stock upon exercise of stock options |
|
291 |
|
|
|
4,751 |
|
Employee payroll taxes paid related to net share settlement of restricted stock units |
|
(6,552 |
) |
|
|
(8,820 |
) |
Net cash used in financing activities |
|
(6,261 |
) |
|
|
(4,069 |
) |
Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash |
|
(115 |
) |
|
|
(60 |
) |
Net increase in cash, cash equivalents, and restricted cash |
|
19,450 |
|
|
|
26,586 |
|
Cash, cash equivalents, and restricted cash at beginning of period |
|
366,667 |
|
|
|
274,019 |
|
Cash, cash equivalents, and restricted cash at end of period |
$ |
386,117 |
|
|
$ |
300,605 |
|
|
|||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
|||||||
(in thousands, except percentages) |
|||||||
(unaudited) |
|||||||
|
Three Months Ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Reconciliation of gross profit and gross margin |
|
|
|
||||
GAAP gross profit |
$ |
91,829 |
|
|
$ |
85,310 |
|
Plus: Stock-based compensation |
|
1,756 |
|
|
|
1,876 |
|
Plus: Employer taxes related to employee stock transactions |
|
44 |
|
|
|
72 |
|
Plus: Amortization of acquired intangible assets |
|
2,407 |
|
|
|
2,087 |
|
Plus: Restructuring costs |
|
— |
|
|
|
137 |
|
Non-GAAP gross profit |
$ |
96,036 |
|
|
$ |
89,482 |
|
GAAP gross margin |
|
82.6 |
% |
|
|
82.6 |
% |
Non-GAAP adjustments |
|
3.8 |
% |
|
|
4.1 |
% |
Non-GAAP gross margin |
|
86.4 |
% |
|
|
86.7 |
% |
|
|
|
|
||||
Reconciliation of operating expenses |
|
|
|
||||
GAAP research and development |
$ |
37,523 |
|
|
$ |
33,508 |
|
Less: Stock-based compensation |
|
(11,222 |
) |
|
|
(10,101 |
) |
Less: Employer taxes related to employee stock transactions |
|
(282 |
) |
|
|
(517 |
) |
Less: Acquisition-related expenses |
|
(295 |
) |
|
|
(161 |
) |
Less: Amortization of acquired intangible assets |
|
(87 |
) |
|
|
(87 |
) |
Less: Restructuring costs |
|
— |
|
|
|
3 |
|
Non-GAAP research and development |
$ |
25,637 |
|
|
$ |
22,645 |
|
|
|
|
|
||||
GAAP sales and marketing |
$ |
48,499 |
|
|
$ |
43,801 |
|
Less: Stock-based compensation |
|
(7,947 |
) |
|
|
(5,951 |
) |
Less: Employer taxes related to employee stock transactions |
|
(190 |
) |
|
|
(267 |
) |
Less: Amortization of acquired intangible assets |
|
(632 |
) |
|
|
(610 |
) |
Less: Restructuring costs |
|
— |
|
|
|
104 |
|
Non-GAAP sales and marketing |
$ |
39,730 |
|
|
$ |
37,077 |
|
|
|
|
|
||||
GAAP general and administrative |
$ |
27,540 |
|
|
$ |
23,801 |
|
Less: Stock-based compensation |
|
(12,015 |
) |
|
|
(9,617 |
) |
Less: Employer taxes related to employee stock transactions |
|
(187 |
) |
|
|
(341 |
) |
Less: Acquisition-related expenses |
|
32 |
|
|
|
— |
|
Less: Amortization of acquired intangible assets |
|
(22 |
) |
|
|
(22 |
) |
Less: Restructuring costs |
|
(8 |
) |
|
|
(114 |
) |
Non-GAAP general and administrative |
$ |
15,340 |
|
|
$ |
13,707 |
|
Note: Certain figures may not sum due to rounding. |
|
|||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
|||||||
(in thousands, except percentages and per share data) |
|||||||
(unaudited) |
|||||||
|
Three Months Ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Reconciliation of operating income (loss) and operating margin |
|
|
|
||||
GAAP operating loss |
$ |
(21,733 |
) |
|
$ |
(15,800 |
) |
Plus: Stock-based compensation |
|
32,940 |
|
|
|
27,545 |
|
Plus: Employer taxes related to employee stock transactions |
|
703 |
|
|
|
1,197 |
|
Plus: Amortization of acquired intangible assets |
|
3,148 |
|
|
|
2,806 |
|
Plus: Acquisition-related expenses |
|
263 |
|
|
|
161 |
|
Plus: Restructuring costs |
|
8 |
|
|
|
144 |
|
Non-GAAP operating income (loss) |
$ |
15,329 |
|
|
$ |
16,053 |
|
GAAP operating margin |
|
(19.5 |
)% |
|
|
(15.3 |
)% |
Non-GAAP adjustments |
|
33.3 |
% |
|
|
30.8 |
% |
Non-GAAP operating margin |
|
13.8 |
% |
|
|
15.5 |
% |
|
|
|
|
||||
Reconciliation of net income (loss) |
|
|
|
||||
GAAP net loss attributable to |
$ |
(24,056 |
) |
|
$ |
(12,218 |
) |
Plus: Stock-based compensation |
|
32,940 |
|
|
|
27,545 |
|
Plus: Employer taxes related to employee stock transactions |
|
703 |
|
|
|
1,197 |
|
Plus: Amortization of debt issuance costs |
|
608 |
|
|
|
455 |
|
Plus: Amortization of acquired intangible assets |
|
3,148 |
|
|
|
2,806 |
|
Plus: Acquisition-related expenses |
|
263 |
|
|
|
161 |
|
Plus: Restructuring costs |
|
8 |
|
|
|
144 |
|
Plus: Adjustment attributable to redeemable non-controlling interest |
|
6,917 |
|
|
|
— |
|
Less: Income tax effects and adjustments |
|
(4,526 |
) |
|
|
(792 |
) |
Non-GAAP net income attributable to |
$ |
16,005 |
|
|
$ |
19,298 |
|
|
|
|
|
||||
Reconciliation of net income (loss) per share, basic |
|
|
|
||||
GAAP net loss per share, basic, attributable to |
$ |
(0.26 |
) |
|
$ |
(0.13 |
) |
Non-GAAP adjustments to net loss attributable to |
|
0.43 |
|
|
|
0.34 |
|
Non-GAAP net income per share, basic, attributable to |
$ |
0.17 |
|
|
$ |
0.21 |
|
|
|
|
|
||||
Reconciliation of net income (loss) per share, diluted(1) |
|
|
|
||||
GAAP net loss per share, diluted, attributable to |
$ |
(0.26 |
) |
|
$ |
(0.13 |
) |
Non-GAAP adjustments to net loss attributable to |
|
0.43 |
|
|
|
0.33 |
|
Non-GAAP net income per share, diluted, attributable to |
$ |
0.17 |
|
|
$ |
0.20 |
|
|
|
|
|
||||
Weighted-average shares used in calculating GAAP net loss per share, basic and diluted |
|
92,876 |
|
|
|
91,522 |
|
|
|
|
|
||||
Weighted-average shares used in calculating non-GAAP net income per share |
|
|
|
||||
Basic |
|
92,876 |
|
|
|
91,522 |
|
Diluted |
|
96,104 |
|
|
|
103,431 |
|
Note: Certain figures may not sum due to rounding. |
(1) On |
|
|||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
|||||||
(in thousands, except percentages) |
|||||||
(unaudited) |
|||||||
Free Cash Flow |
|||||||
|
Three Months Ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating activities |
|
28,647 |
|
|
|
22,152 |
|
Less: |
|
|
|
||||
Purchases of property and equipment |
|
(457 |
) |
|
|
(235 |
) |
Capitalization of internal-use software costs |
|
(1,092 |
) |
|
|
(1,072 |
) |
Free cash flow |
$ |
27,098 |
|
|
$ |
20,845 |
|
Net cash (used in) provided by investing activities |
$ |
(2,821 |
) |
|
$ |
8,563 |
|
Net cash used in financing activities |
$ |
(6,261 |
) |
|
$ |
(4,069 |
) |
Free cash flow margin |
|
24.4 |
% |
|
|
20.2 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240530180234/en/
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