Revenue accelerates to 49% year-over-year
growth to a record $37.3 million
Over 11,600 customers now using PagerDuty to
power their digital transformations
Best in class gross margins above 85%
PagerDuty, Inc. (NYSE:PD), a global leader in digital operations
management, today announced financial results for the first quarter
of fiscal year 2020 ended April 30, 2019.
“We are pleased to report strong Q1 results in our first quarter
as a public company, with revenue accelerating to 49%
year-over-year growth and best-in-class gross margins above 85%,”
said Jennifer Tejada, Chief Executive Officer of PagerDuty. “We
continued to see growing demand across industry verticals and
customer segments, especially the enterprise segment. Our existing
customers are expanding their use of PagerDuty, adding teams and
adopting new products like Event Intelligence and Analytics that
enable a more proactive approach to digital operations. With our
community applying PagerDuty to new use cases every day, we are
just scratching the surface of the potential for our business.”
First Quarter Fiscal 2020 Financial Highlights
- Revenue: Total revenue was $37.3
million, up 49% year-over-year.
- Gross Margin: GAAP gross margin
was 85.3% up 80 basis points compared to the first quarter of
fiscal 2019. Non-GAAP gross margin was 85.7% compared to Non-GAAP
gross margin of 84.7% in the first quarter of fiscal 2019.
- Operating Loss: GAAP operating
loss was $12.7 million, or 34.1% of revenue, compared to $7.0
million, or 28.0% of revenue, in the first quarter of fiscal 2019.
Non-GAAP operating loss was $7.9 million, or 21.2% of revenue,
compared to $3.8 million, or 15.3% of revenue, in the first quarter
of fiscal 2019.
- Net Loss: GAAP net loss was
$12.1 million, compared to $6.6 million in the first quarter of
fiscal 2019. GAAP net loss per share was $0.37, compared to $0.32
in the first quarter of fiscal 2019. Non-GAAP net loss was $7.3
million, compared to $3.4 million in the first quarter of fiscal
2019. Non-GAAP net loss per share was $0.22, compared to $0.16 in
the first quarter of fiscal 2019.
- Cash Flow: Net cash used in
operations was $7.6 million, or 20.3% of revenue, compared to $4.3
million, or 17.2% of revenue, in the first quarter of fiscal 2019.
Free cash flow was negative $8.8 million, or 23.5% of revenue,
compared to negative $4.7 million, or 18.8% of revenue, in the
first quarter of fiscal 2019.
- Cash and Cash Equivalents were
$338.0 million as of April 30, 2019.
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.
Recent Highlights
- Customer Growth: PagerDuty had
over 11,600 customers as of April 30, 2019. New and expansion
customers include Zendesk, Yahoo! Japan, SoundCloud, TripActions,
Aveanna Healthcare, Vocalink, and REA Group.
- Product Innovation: PagerDuty
delivered enhancements to Event Intelligence that use automation
and machine learning to more quickly recognize and prevent
potential incidents. We added one-touch conferencing to Modern
Incident Response to connect teams quickly and introduced status
communications and live service updates to keep impacted teams
informed in real-time. Additionally, through new bi-directional
integrations, we enable NOCs, DevOps, Security Ops, and Customer
Support to more effectively respond to incidents together.
- Ecosystem Expansion: PagerDuty’s
partner ecosystem surpassed 350 integrations, including more than
25 integrations for Security Operations teams and deeper
integrations with ServiceNow and Slack.
- Awards: PagerDuty was selected
as a Best Place to Work in the Bay Area by the San Francisco
Business Times and won a Gold Stevie award for excellence in
customer support.
Financial Outlook
For the second quarter of fiscal 2020, PagerDuty currently
expects:
- Total revenue of $38.5 million - $39.5
million, representing a growth rate of 39% - 43%
year-over-year
- Non-GAAP net loss per share of $0.09 -
$0.10, assuming approximately 75 million shares
For the full fiscal year 2020, PagerDuty currently
expects:
- Total revenue of $161 million - $163
million, representing a growth rate of 37%-38% year-over-year
- Non-GAAP net loss per share of $0.37 -
$0.38, assuming approximately 65 million shares
These statements are forward-looking and actual results may
differ materially. Please refer to the Forward-Looking Statements
safe harbor below for information on the factors that could cause
our actual results to differ materially from these forward-looking
statements.
PagerDuty has not reconciled its expectations as to non-GAAP net
loss per share to GAAP net loss per share because certain items are
out of its control or cannot be reasonably predicted. Accordingly,
a reconciliation for forward-looking non-GAAP net loss per share is
not available without unreasonable effort.
Conference Call Information:
PagerDuty will host a conference call and live webcast for
analysts and investors at 2:00 p.m. Pacific Time on June 6, 2019.
The news release with the financial results will be accessible from
PagerDuty’s website at investor.pagerduty.com prior to the
conference call. Interested parties can access the call by dialing
(833) 227-5837 or (647) 689-4067 for callers outside North America,
and using the passcode 9284028.
A live webcast of the conference call will be accessible from
the PagerDuty investor relations website at investor.pagerduty.com.
A telephonic replay of the conference call will be available
through June 20, 2019 and may be accessed by dialing (800) 585-8367
or (416) 621-4642 for callers outside North America, and using the
conference ID: 9284028.
Supplemental Financial and Other Information:
Supplemental financial and other information can be accessed
through PagerDuty’s investor relations website at
investor.pagerduty.com. PagerDuty uses the investor relations
section on its website as the means of complying with its
disclosure obligations under Regulation FD. Accordingly, we
recommend that investors should monitor PagerDuty’s investor
relations website in addition to following PagerDuty’s press
releases, SEC filings, social media, including PagerDuty’s Twitter
account (twitter.com/pagerduty), the Twitter account @jenntejada
and Facebook page (facebook.com/pagerduty), and public conference
calls and webcasts.
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 operating
loss, non-GAAP operating margin, non-GAAP net
loss, non-GAAP net loss per share, and free cash
flow.
PagerDuty believes that non-GAAP financial measures, when taken
collectively, may be helpful to investors because they provide
consistency and comparability with past financial performance and
can assist in comparisons with other companies, some of which use
similar non-GAAP financial measures to supplement their GAAP
results. The non-GAAP financial information is presented for
supplemental informational purposes only, and should not be
considered a substitute for financial information presented in
accordance with GAAP, and may be different from similarly-titled
non-GAAP measures used by other companies.
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.
PagerDuty defines non-GAAP operating loss as GAAP loss from
operations and non-GAAP net loss (which is used in calculating
non-GAAP net loss per share) as GAAP net loss excluding share-based
compensation expense and charitable contribution - issuance of
common stock warrant. There are a number of limitations related to
the use of these non-GAAP measures as compared to GAAP operating
loss and net loss, including that the non-GAAP
measures exclude share-based compensation expense, which has
been, and will continue to be for the foreseeable future, a
significant recurring expense in PagerDuty’s business and an
important part of its compensation strategy.
PagerDuty defines free cash flow as net cash provided by (used
in) operating activities, less cash used for purchases of property
and equipment. In addition to the reasons stated above, PagerDuty
believes that free cash flow is useful to investors as a liquidity
measure because it measures PagerDuty’s ability to generate or use
cash in excess of its capital investments in property and equipment
to enhance the strength of its balance sheet and further invest in
its business and potential strategic initiatives. PagerDuty uses
free cash flow in conjunction with traditional GAAP measures as
part of its overall assessment of its liquidity, including the
preparation of PagerDuty’s annual operating budget and quarterly
forecasts, to evaluate the effectiveness of its business
strategies, and to assess its liquidity.
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.
PagerDuty encourages investors to review the related GAAP
financial measures and the reconciliation of these non-GAAP
financial measures to their most directly comparable GAAP financial
measures, which it includes in press releases announcing quarterly
financial results, including this press release, and not to rely on
any single financial measure to evaluate PagerDuty’s business.
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 GAAP and non-GAAP guidance for the
second fiscal quarter and full fiscal 2020 and financial outlook
and market positioning. Words such as “expect,” “anticipate,”
“should,” “believe,” “hope,” “target,” “project,” “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 detailed in our final
prospectus related to our initial public offering filed with the
Securities and Exchange Commission (SEC) on April 11, 2019.
Additional information will be made available in our quarterly
report on Form 10-Q for the quarter ended April 30, 2019 and other
filings and reports that we may file from time to time with the
SEC. In particular, the following risks and uncertainties, among
others, could cause results to differ materially from those
expressed or implied by such forward-looking statements: total
revenue, non-GAAP net loss per share and shares outstanding for the
second quarter and full year of fiscal 2020, our ability to achieve
and maintain future profitability, our ability to attract new
customers and retain and sell additional functionality and services
to our existing customers, our ability to sustain and manage our
growth, our dependence on revenue from a single product, our
ability to compete effectively in an increasingly competitive
market, and general market, political, economic, and business
conditions. 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 PagerDuty
PagerDuty, Inc. (NYSE: PD) is a leader in digital operations
management. PagerDuty empowers organizations of all sizes with
real-time and data-driven insights to drive better business
results. Teams including DevOps, ITOps, SecOps and Support use
PagerDuty’s award-winning platform for real-time operations to
improve operations, deliver exceptional customer experiences, and
accelerate innovation. Today, over 11,600 organizations across all
industries have deployed PagerDuty. Notable customers include IBM,
GE, Box, and American Eagle Outfitters. To learn more and try
PagerDuty for free, visit www.pagerduty.com. Follow our blog and connect
with us on Twitter, LinkedIn, YouTube and Facebook.
PagerDuty, Inc.
Condensed Consolidated Statements of
Operations and Comprehensive Loss
(in thousands, except per share data)
(unaudited)
Three Months Ended April 30, 2019
2018 Revenue $ 37,314 $ 25,020 Cost of revenue(1) 5,486
3,885 Gross profit 31,828 21,135
Operating expenses: Research and development(1) 10,906 7,719 Sales
and marketing(1) 21,167 13,294 General and administrative(1) 12,484
7,116 Total operating expenses 44,557 28,129
Loss from operations (12,729 ) (6,994 ) Interest income 889
130 Other income, net 21 389 Loss before provision
for income taxes (11,819 ) (6,475 ) Provision for income taxes (245
) (104 ) Net loss and comprehensive loss $ (12,064 ) $ (6,579 ) Net
loss per share, basic and diluted $ (0.37 ) $ (0.32 )
Weighted-average shares used in calculating net loss per share,
basic and diluted 32,510 20,878 (1) Share-based
compensation expense included in the condensed consolidated
statements of operations was as follows (in thousands, unaudited):
Three
Months Ended April 30, 2019 2018 Cost of
revenue $ 143 $ 61 Research and development 860 715 Sales and
marketing 1,464 852 General and administrative 2,345 1,529
Total
$ 4,812 $ 3,157
PagerDuty, Inc.
Condensed Consolidated Balance
Sheets
(in thousands)
As of April 30, As of January 31, 2019
2019 Assets
(unaudited)
Current assets: Cash and cash equivalents $ 338,038 $ 127,875
Accounts receivable, net of allowance for doubtful accounts of
$1,965 and $2,360 as of April 30, 2019 and January 31, 2019,
respectively 31,669 33,538 Deferred contract costs, current 6,559
6,002 Prepaid expenses and other current assets 7,294 5,422
Total current assets 383,560 172,837 Property and equipment,
net 7,700 5,772 Deferred contract costs, non-current 12,087 11,470
Other assets 3,620 7,155
Total assets $
406,967 $ 197,234
Liabilities, redeemable
convertible preferred stock and stockholders’ equity (deficit)
Current liabilities: Accounts payable $ 6,252 $ 7,657 Accrued
expenses and other current liabilities 7,593 7,145 Accrued
compensation 8,735 10,050 Deferred revenue, current 66,176
63,957 Total current liabilities 88,756 88,809 Deferred
revenue, non-current 369 147 Other liabilities 4,215 4,185
Total liabilities 93,340 93,141 Redeemable
convertible preferred stock — 173,023
Stockholders’ equity (deficit):
Common stock — — Additional paid-in-capital 454,559 59,938
Accumulated deficit (140,932 ) (128,868 )
Total stockholders’ equity (deficit)
313,627 (68,930 )
Total liabilities, redeemable
convertible preferred stock and stockholders’ equity (deficit)
$ 406,967 $ 197,234
PagerDuty, Inc.
Condensed Consolidated Statements of
Cash Flows
(in thousands)
(unaudited)
Three Months Ended April 30, 2019
2018 Cash used in operating activities Net loss $
(12,064 ) $ (6,579 ) Adjustments to reconcile net loss to net cash
used in operating activities: Depreciation and amortization 470 383
Amortization of deferred contract costs 1,608 833 Stock-based
compensation 4,812 3,157 Bad debt expense 281 32 Changes in
operating assets and liabilities: Accounts receivable 1,588 9
Deferred contract costs (2,782 ) (2,188 ) Prepaid expenses and
other assets (1,635 ) (2,274 ) Accounts payable (1,094 ) (1,228 )
Accrued expenses and other liabilities 124 (402 ) Accrued
compensation (1,315 ) 598 Deferred revenue 2,441 3,349
Net cash used in operating activities (7,566 ) (4,310
)
Cash used in investing activities Purchases of property
and equipment (1,190 ) (382 )
Net cash used in investing
activities (1,190 ) (382 )
Cash from financing
activities Proceeds from initial public offering, net of
underwriters' discounts and commissions 220,086 — Proceeds from
issuance of common stock upon exercise of stock options 2,240 306
Proceeds from early exercised stock options, net of repurchases —
(7 ) Proceeds from repayment of promissory note 515 — Payments of
deferred offering costs (3,923 ) —
Net cash provided by
financing activities 218,918 299 Net increase
(decrease) in cash, cash equivalents and restricted cash 210,162
(4,393 ) Cash, cash equivalents and restricted cash at beginning of
year 130,323 46,451
Cash, cash equivalents and
restricted cash at end of year $ 340,485 $ 42,058
PagerDuty, Inc.
Reconciliation of GAAP to Non-GAAP
Data
(in thousands, except percentages and per
share data)
(unaudited)
Three Months Ended April 30, 2019 GAAP
Stock-basedCompensation
Non-GAAP Cost of revenue $ 5,486 $
(143
)
$ 5,343 Gross profit 31,828 143 31,971 Gross margin 85.3 % 0.4 %
85.7 % Operating expenses: Research and development 10,906
(860
)
10,046 Sales and marketing 21,167
(1,464
)
19,703 General and administrative 12,484
(2,345
)
10,139 Operating loss (12,729 ) 4,812 (7,917 ) Operating margin
(34.1 )% 12.9 % (21.2 )% Net loss $ (12,064 ) $ 4,812 $ (7,252 )
Net loss per share $ (0.37 ) $ (0.22 )
Three Months Ended
April 30, 2018 GAAP
Stock-basedCompensation
Non-GAAP Cost of revenue $ 3,885 $
(61
)
$ 3,824 Gross profit 21,135 61 21,196 Gross margin 84.5 % 0.2 %
84.7 % Operating expenses: Research and development 7,719
(715
)
7,004 Sales and marketing 13,294
(852
)
12,442 General and administrative 7,116
(1,529
)
5,587 Operating loss (6,994 ) 3,157 (3,837 ) Operating margin (28.0
)% 12.6 % (15.3 )% Net loss $ (6,579 ) $ 3,157 $ (3,422 ) Net loss
per share $ (0.32 ) $ (0.16 )
PagerDuty, Inc.
Reconciliation of GAAP to Non-GAAP
Financial Measures
(in thousands, except percentages and per
share data)
(unaudited)
Free Cash Flow
Three Months Ended April 30, 2019
2018 Net cash used in operating activities $ (7,566 ) $
(4,310 ) Less: Purchases of property and equipment (1,190 ) (382 )
Free cash flow $ (8,756 ) $ (4,692 ) Net cash used in investing
activities (1,190 ) (382 ) Net cash provided by financing
activities 218,918 299 Free cash flow margin (23.5 )% (18.8 )%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190606005812/en/
Investor Relations Contact:Chris Danne, Ellen DavisThe
Blueshirt Group415-217-5865, 415-217-7722Chris@blueshirtgroup.com,
Ellen@blueshirtgroup.com,
Source: PagerDuty
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