Third quarter revenue increased 15% year over
year to $108.7 million Third quarter GAAP operating loss of $20.8
million, non-GAAP operating income of $15.0 million
PagerDuty, Inc. (NYSE:PD), a leader in digital operations
management, today announced financial results for the third quarter
of fiscal 2024, ended October 31, 2023.
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PagerDuty Q3 FY24 Infographic (Graphic:
PagerDuty)
“Results in the third quarter were above our guidance ranges
with 15% revenue growth and a non-GAAP operating margin of 14%,”
said Jennifer Tejada, Chairperson and CEO, PagerDuty. “Momentum and
innovation within the PagerDuty Operations Cloud continued in the
quarter with new AI enhancements and the acquisition of Jeli in
November to address our customers’ biggest operational
challenges.”
Third Quarter Fiscal 2024 Financial Highlights
- Revenue was $108.7 million, an increase of 15.4% year over
year.
- GAAP operating loss was $20.8 million; GAAP operating margin of
negative 19.2%.
- Non-GAAP operating income was $15.0 million; non-GAAP operating
margin of 13.8%.
- GAAP net loss per share attributable to PagerDuty, Inc. common
stockholders was $0.16; non-GAAP net income per diluted share
attributable to PagerDuty, Inc. common stockholders was $0.20.
- Operating cash flow was $16.9 million, with free cash flow of
$15.2 million.
- Cash, cash equivalents and current investments were $575.3
million as of October 31, 2023.
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.
Third Quarter and Recent Highlights
- Annual recurring revenue grew 13% year over year to $438.9
million.
- Customers with annual recurring revenue over $100,000 grew 10%
to 778 as of October 31, 2023, compared to 710 in the year ago
period.
- Dollar-based net retention rate of 110% as of October 31, 2023,
compared to 123% in the year ago period.
- Total free and paid customers of more than 27,000 as of October
31, 2023 representing approximately 18% growth year over year.
- Total paid customers of 15,049 as of October 31, 2023, compared
to 15,265 in the year ago period.
- Lands and expands include: Banco Santander, Carhartt,
Carparts.com, Cloudflare, Docaposte, Equinix, Salesforce,
Snowflake, and The Vanguard Group.
- Closed a $350 million convertible senior notes offering.
- Acquired Jeli, Inc. on November 15, 2023 to transform
operations with an enterprise-grade, all-in-one incident management
solution.
- Appointed Eric Johnson as Chief Information Officer.
- Product innovation:
- Launched several new capabilities across the PagerDuty
Operations Cloud℠: Workflow Automation for Salesforce Service Cloud
and Zendesk, and the release of Private Status Pages.
- PagerDuty Operations Cloud Fall 2023 release includes event
orchestration, runbook automation and updates around its recently
announced generative AI (GenAI) use cases, helping organizations
cut operating costs, accelerate innovation, and mitigate risk of
operational failures.
- Announced PagerDuty Copilot delivering Generative AI-enabled
capabilities across the PagerDuty Operations Cloud to drive
significant productivity gains and create a better user experience
while managing digital operations.
- Named as a leader in GigaOm’s 2023 Incident Response Platforms
Radar evaluation. PagerDuty received a perfect “exceptional” score
in 8 of 10 key criteria and evaluation metrics in the report.
- Awards
- PagerDuty received Fortune awards, including Best Workplaces in
Technology and Best Medium Workplaces.
- Other recognition includes: SF Business Times - Largest San
Francisco Tech Employers, Global Top 100 - Inspiring Workplaces,
Exame Melhores Empresas Para Trabalhar - Best Places to Work in
Portugal.
Financial Outlook
For the fourth quarter of fiscal 2024, PagerDuty currently
expects:
- Total revenue of $109.5 million - $111.5 million, representing
a growth rate of 8% - 10% year over year
- Non-GAAP net income per diluted share attributable to
PagerDuty, Inc. common stockholders of $0.14 - $0.15 assuming
approximately 95 million diluted shares
For the full fiscal year 2024, PagerDuty currently
expects:
- Total revenue of $429.0 million - $431.0 million, representing
a growth rate of 16% year over year
- Non-GAAP net income per diluted share attributable to
PagerDuty, Inc. common stockholders of $0.72 - $0.73 assuming
approximately 101 million diluted shares
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.
PagerDuty has not reconciled its expectations as to non-GAAP net
income (loss) per share attributable to PagerDuty, Inc. common
stockholders to GAAP net loss per share attributable to PagerDuty,
Inc. common stockholders because certain items are out of its
control or cannot be reasonably predicted. Accordingly, a
reconciliation for forward-looking non-GAAP net income (loss) per
share attributable to PagerDuty, Inc. common stockholders 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 November 30,
2023. This news release with the financial results will be
accessible from PagerDuty’s website at investor.pagerduty.com prior
to the conference call. A live webcast of the conference call will
be accessible from the PagerDuty investor relations website at
investor.pagerduty.com.
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 monitor PagerDuty’s investor relations
website in addition to following PagerDuty’s press releases, SEC
filings, social media, including PagerDuty’s LinkedIn account
(https://www.linkedin.com/company/482819), X (formerly Twitter)
account @pagerduty, the X 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 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 PagerDuty, Inc. common stockholders,
non-GAAP net income (loss) per share attributable to PagerDuty,
Inc. common stockholders, 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, 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.
Specifically, PagerDuty excludes the following from its
historical and prospective non-GAAP financial measures, as
applicable:
Stock-based Compensation: PagerDuty utilizes stock-based
compensation to attract and retain employees. It is principally
aimed at aligning their interests with those of its stockholders
and at long-term retention, rather than to address operational
performance for any particular period. As a result, stock-based
compensation expenses vary for reasons that are generally unrelated
to financial and operational performance in any particular
period.
Employer Taxes Related to Employee Stock Transactions: PagerDuty
views the amount of employer taxes related to its employee stock
transactions as an expense that is dependent on its stock price,
employee exercise and other award disposition activity, and other
factors that are beyond PagerDuty’s control. As a result, employer
taxes related to employee stock transactions vary for reasons that
are generally unrelated to financial and operational performance in
any particular period.
Amortization of Acquired Intangible Assets: PagerDuty views
amortization of acquired intangible assets as items arising from
pre-acquisition activities determined at the time of an
acquisition. While these intangible assets are evaluated for
impairment regularly, amortization of the cost of purchased
intangibles is an expense that is not typically affected by
operations during any particular period.
Acquisition-Related Expenses: PagerDuty views
acquisition-related expenses, such as transaction costs,
acquisition-related retention payments, and acquisition-related
asset impairment, as events that are not necessarily reflective of
operational performance during a period. In particular, PagerDuty
believes the consideration of measures that exclude such expenses
can assist in the comparison of operational performance in
different periods which may or may not include such 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: PagerDuty views restructuring costs, such
as employee severance-related costs and real estate impairment
costs, as events that are not necessarily reflective of operational
performance during a period. In particular, PagerDuty believes the
consideration of measures that exclude such expenses can assist in
the comparison of operational performance in different periods
which may or may not include such expenses.
Gains (or losses) on partial extinguishment of convertible
senior notes: PagerDuty views gains (or losses) on partial
extinguishment of debt as events that are not necessarily
reflective of operational performance during a period. PagerDuty
believes that the consideration of measures that exclude such gain
(or loss) impact can assist in the comparison of operational
performance in different periods which may or may not include such
gains (or losses).
Adjustment Attributable to Redeemable Non-Controlling Interest:
PagerDuty adjusts the value of redeemable non-controlling interest
of its joint venture PagerDuty K.K. according to the operating
agreement. PagerDuty believes this adjustment is not reflective of
operational performance during a period and exclusion of such
adjustments can assist in comparison of operational performance in
different periods.
Income Tax Effect of Non-GAAP Adjustments: PagerDuty excludes
the related income tax effect of the non-GAAP adjustments described
above and eliminates the impact of non-recurring and period
specific items, which can vary in size and frequency. In
particular, PagerDuty believes the consideration of measures that
exclude such impacts can assist in the comparison of operational
performance in different periods, which may or may not include
items such as acquisition related income tax benefits.
PagerDuty defines non-GAAP gross profit as gross profit adjusted
for stock-based compensation expense, employer taxes related to
employee stock transactions, amortization of acquired intangible
assets, and restructuring costs. PagerDuty defines non-GAAP gross
margin as non-GAAP gross profit as a percentage of revenue.
PagerDuty defines non-GAAP operating income (loss) as GAAP loss
from operations excluding stock-based compensation expense,
employer taxes related to employee stock transactions, amortization
of acquired intangible assets, acquisition-related expenses, and
restructuring costs. PagerDuty defines non-GAAP net income (loss)
attributable to PagerDuty, Inc. common stockholders (which is used
in calculating non-GAAP net income (loss) per share attributable to
PagerDuty, Inc. common stockholders) as GAAP net loss attributable
to PagerDuty, Inc. common stockholders excluding stock-based
compensation expense, employer taxes related to employee stock
transactions, amortization of debt issuance costs, amortization of
acquired intangible assets, acquisition-related expenses, which
include transaction costs and acquisition-related retention
payments, which are not necessarily reflective of operational
performance during a given period, restructuring costs, adjustment
attributable to redeemable non-controlling interest, and the
associated tax impact of these items, where applicable. 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 stock-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 and capitalization of internal-use software costs. 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 in order 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 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 filed with the
Securities and Exchange Commission (SEC) on March 16, 2023.
Additional information will be made available in our Quarterly
Report on Form 10-Q for the quarter ended October 31, 2023 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: the effect
of unfavorable conditions in our industry or the global economy, or
reductions in information spending on our business and results of
operations; 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
global 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 Inc.
PagerDuty, Inc. (NYSE:PD) is a global leader in digital
operations management, enabling customers to achieve operational
efficiency at scale with the PagerDuty Operations Cloud. The
PagerDuty Operations Cloud combines AIOps, Automation, Incident
Management, and Customer Service Operations into a flexible,
resilient and scalable platform to increase innovation velocity,
grow revenue, reduce cost, and mitigate the risk of operational
failure. More than half of the Fortune 500 and nearly 70% of the
Fortune 100 rely on PagerDuty as essential infrastructure for the
modern enterprise. To learn more and try PagerDuty for free, visit
www.pagerduty.com.
PagerDuty, Inc.
Condensed Consolidated
Statements of Operations
(in thousands, except per share
data)
(unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Revenue
$
108,720
$
94,203
$
319,582
$
269,827
Cost of revenue(1)
19,705
18,007
57,474
52,090
Gross profit
89,015
76,196
262,108
217,737
Operating expenses:
Research and development(1)
34,272
35,004
104,221
100,307
Sales and marketing(1)
49,630
47,118
143,155
143,001
General and administrative(1)
25,955
26,616
77,547
77,316
Total operating expenses
109,857
108,738
324,923
320,624
Loss from operations
(20,842
)
(32,542
)
(62,815
)
(102,887
)
Interest income
4,522
1,382
11,300
2,760
Interest expense
(1,454
)
(1,360
)
(4,184
)
(4,072
)
Gain on partial extinguishment of
convertible senior notes
3,970
—
3,970
—
Other income (expense), net
673
(172
)
2,982
(1,326
)
Loss before benefit from income taxes
(13,131
)
(32,692
)
(48,747
)
(105,525
)
Benefit from income taxes
41
(112
)
197
1,302
Net loss
$
(13,090
)
$
(32,804
)
$
(48,550
)
$
(104,223
)
Net loss attributable to redeemable
non-controlling interest
(324
)
(262
)
(1,513
)
(362
)
Net loss attributable to PagerDuty,
Inc.
$
(12,766
)
$
(32,542
)
$
(47,037
)
$
(103,861
)
Adjustment attributable to redeemable
non-controlling interest
2,359
—
4,088
—
Net loss attributable to PagerDuty, Inc.
common stockholders
$
(15,125
)
$
(32,542
)
$
(51,125
)
$
(103,861
)
Net loss per share, basic and diluted,
attributable to PagerDuty, Inc. common stockholders
$
(0.16
)
$
(0.36
)
$
(0.55
)
$
(1.18
)
Weighted-average shares used in
calculating net loss per share, basic and diluted
93,104
89,285
92,257
88,200
(1) Includes stock-based compensation expense as follows:
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Cost of revenue
$
1,820
$
1,937
$
5,860
$
4,948
Research and development
11,128
10,824
34,002
30,066
Sales and marketing
8,094
8,004
22,362
22,533
General and administrative
10,786
10,679
32,686
28,931
Total
$
31,828
$
31,444
$
94,910
$
86,478
PagerDuty, Inc.
Condensed Consolidated Balance
Sheets
(in thousands)
(unaudited)
As of October 31, 2023
As of January 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
380,307
$
274,019
Investments
195,006
202,948
Accounts receivable, net of allowance for
credit losses of $1,285 and $2,014 as of October 31, 2023 and
January 31, 2023, respectively
71,106
91,345
Deferred contract costs, current
18,893
18,674
Prepaid expenses and other current
assets
15,742
13,350
Total current assets
681,054
600,336
Property and equipment, net
18,746
18,390
Deferred contract costs, non-current
24,495
27,715
Lease right-of-use assets
10,120
13,982
Goodwill
118,862
118,862
Intangible assets, net
28,807
37,224
Other assets
4,646
1,364
Total assets
$
886,730
$
817,873
Liabilities, redeemable non-controlling
interest, and stockholders’ equity
Current liabilities:
Accounts payable
$
6,763
$
7,398
Accrued expenses and other current
liabilities
13,323
11,804
Accrued compensation
28,833
41,834
Deferred revenue, current
192,920
204,137
Lease liabilities, current
6,088
5,904
Total current liabilities
247,927
271,077
Convertible senior notes, net
447,389
282,908
Deferred revenue, non-current
3,499
4,914
Lease liabilities, non-current
8,391
12,704
Other liabilities
4,933
4,184
Total liabilities
712,139
575,787
Redeemable non-controlling interest
5,472
1,108
Stockholders’ equity:
Common stock, $0.000005 par value;
1,000,000,000 shares authorized; 94,219,644 and 91,178,671 shares
issued and 91,888,642 and 91,178,671 outstanding as of October 31,
2023 and January 31, 2023, respectively
—
—
Additional paid-in-capital
745,114
719,816
Accumulated other comprehensive loss
(1,712
)
(1,592
)
Accumulated deficit
(524,283
)
(477,246
)
Treasury stock at cost, 2,331,002 and —
shares as of October 31, 2023 and January 31, 2023,
respectively
(50,000
)
—
Total stockholders’ equity
169,119
240,978
Total liabilities, redeemable
non-controlling interest, and stockholders’ equity
$
886,730
$
817,873
PagerDuty, Inc.
Condensed Consolidated
Statements of Cash Flows
(in thousands) (unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Cash flows from operating
activities
Net loss attributable to PagerDuty, Inc.
common stockholders
$
(15,125
)
$
(32,542
)
$
(51,125
)
$
(103,861
)
Net loss and adjustment attributable to
redeemable non-controlling interest
2,035
(262
)
2,575
(362
)
Net loss
(13,090
)
(32,804
)
(48,550
)
(104,223
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
5,025
4,498
15,016
12,778
Amortization of deferred contract
costs
5,123
4,922
15,286
14,178
Amortization of debt issuance costs
523
461
1,456
1,376
Gain on partial extinguishment of
convertible senior notes
(3,970
)
—
(3,970
)
—
Stock-based compensation
31,828
31,444
94,910
86,478
Non-cash lease expense
1,106
611
3,425
2,913
Tax benefit related to release of
valuation allowance
—
—
—
(1,330
)
Other
(1,524
)
(124
)
(1,426
)
1,686
Changes in operating assets and
liabilities:
Accounts receivable
(5,420
)
(13,473
)
18,983
3,048
Deferred contract costs
(5,520
)
(6,290
)
(12,285
)
(16,323
)
Prepaid expenses and other assets
(1,289
)
(1,424
)
(2,674
)
(2,934
)
Accounts payable
(757
)
1,109
(1,002
)
(1,117
)
Accrued expenses and other liabilities
781
(4,593
)
767
(1,350
)
Accrued compensation
5,706
6,034
(13,086
)
(624
)
Deferred revenue
(119
)
10,181
(12,547
)
8,635
Lease liabilities
(1,486
)
(1,000
)
(4,484
)
(3,783
)
Net cash provided by (used in)
operating activities
16,917
(448
)
49,819
(592
)
Cash flows from investing
activities
Purchases of property and equipment
(245
)
(815
)
(1,193
)
(3,755
)
Capitalization of internal-use software
costs
(1,441
)
(988
)
(3,812
)
(2,725
)
Business acquisition, net of cash
acquired
—
—
—
(66,262
)
Asset acquisition
—
—
—
(1,845
)
Purchases of available-for-sale
investments
(43,927
)
(59,842
)
(151,984
)
(155,310
)
Proceeds from maturities of
available-for-sale investments
56,500
54,425
164,064
149,625
Purchases of non-marketable equity
investments
—
—
(200
)
—
Net cash provided by (used in)
investing activities
10,887
(7,220
)
6,875
(80,272
)
Cash flows from financing
activities
Proceeds from issuance of convertible
senior notes, net of issuance costs
391,543
—
391,543
—
Purchases of capped calls related to
convertible senior notes
(55,102
)
—
(55,102
)
—
Repurchases of convertible senior
notes
(223,471
)
—
(223,471
)
—
Investment from redeemable non-controlling
interest holder
—
—
1,781
1,908
Proceeds from employee stock purchase
plan
—
—
6,292
5,736
Proceeds from issuance of common stock
upon exercise of stock options
973
1,899
8,390
8,459
Employee payroll taxes paid related to net
share settlement of restricted stock units
(9,786
)
(9,864
)
(25,772
)
(22,187
)
Repurchase of common stock
(50,000
)
—
(50,000
)
—
Net cash provided by (used in)
financing activities
54,157
(7,965
)
53,661
(6,084
)
Effects of foreign currency exchange rates
on cash, cash equivalents, and restricted cash
(177
)
(365
)
(451
)
(504
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
81,784
(15,998
)
109,904
(87,452
)
Cash, cash equivalents, and restricted
cash at beginning of period
302,139
278,331
274,019
349,785
Cash, cash equivalents, and restricted
cash at end of period
$
383,923
$
262,333
$
383,923
$
262,333
PagerDuty, Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(in thousands, except
percentages)
(unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Reconciliation of gross profit and
gross margin
GAAP gross profit
$
89,015
$
76,196
$
262,108
$
217,737
Plus: Stock-based compensation
1,820
1,937
5,860
4,948
Plus: Employer taxes related to employee
stock transactions
21
38
138
79
Plus: Amortization of acquired intangible
assets
2,087
1,949
6,260
5,314
Plus: Restructuring costs
—
—
137
—
Non-GAAP gross profit
$
92,943
$
80,120
$
274,503
$
228,078
GAAP gross margin
81.9
%
80.9
%
82.0
%
80.7
%
Non-GAAP adjustments
3.6
%
4.2
%
3.9
%
3.8
%
Non-GAAP gross margin
85.5
%
85.1
%
85.9
%
84.5
%
Reconciliation of operating
expenses
GAAP research and development
$
34,272
$
35,004
$
104,221
$
100,307
Less: Stock-based compensation
(11,128
)
(10,824
)
(34,002
)
(30,066
)
Less: Employer taxes related to employee
stock transactions
(210
)
(202
)
(930
)
(559
)
Less: Acquisition-related expenses
(161
)
(738
)
(484
)
(3,100
)
Less: Amortization of acquired intangible
assets
(88
)
(29
)
(262
)
(145
)
Less: Restructuring costs
—
—
5
—
Non-GAAP research and development
$
22,685
$
23,211
$
68,548
$
66,437
GAAP sales and marketing
$
49,630
$
47,118
$
143,155
$
143,001
Less: Stock-based compensation
(8,094
)
(8,004
)
(22,362
)
(22,533
)
Less: Employer taxes related to employee
stock transactions
(39
)
(148
)
(589
)
(468
)
Less: Amortization of acquired intangible
assets
(610
)
(643
)
(1,830
)
(1,936
)
Less: Restructuring costs
1
—
49
—
Non-GAAP sales and marketing
$
40,888
$
38,323
$
118,423
$
118,064
GAAP general and administrative
$
25,955
$
26,616
$
77,547
$
77,316
Less: Stock-based compensation
(10,786
)
(10,679
)
(32,686
)
(28,931
)
Less: Employer taxes related to employee
stock transactions
(145
)
(195
)
(658
)
(650
)
Less: Acquisition-related expenses
(530
)
(164
)
(530
)
(1,454
)
Less: Amortization of acquired intangible
assets
(21
)
(7
)
(65
)
(36
)
Less: Restructuring costs
(133
)
—
(1,451
)
—
Non-GAAP general and administrative
$
14,340
$
15,571
$
42,157
$
46,245
Note: Certain figures may not sum due to rounding.
PagerDuty, Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(in thousands, except percentages
and per share data)
(unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Reconciliation of operating income
(loss) and operating margin
GAAP operating loss
$
(20,842
)
$
(32,542
)
$
(62,815
)
$
(102,887
)
Plus: Stock-based compensation
31,828
31,444
94,910
86,478
Plus: Employer taxes related to employee
stock transactions
415
583
2,315
1,756
Plus: Amortization of acquired intangible
assets
2,806
2,628
8,417
7,431
Plus: Acquisition-related expenses
691
902
1,014
4,554
Plus: Restructuring costs
132
—
1,534
—
Non-GAAP operating income (loss)
$
15,030
$
3,015
$
45,375
$
(2,668
)
GAAP operating margin
(19.2
)%
(34.5
)%
(19.7
)%
(38.1
)%
Non-GAAP adjustments
33.0
%
37.7
%
33.9
%
37.1
%
Non-GAAP operating margin
13.8
%
3.2
%
14.2
%
(1.0
)%
Reconciliation of net income
(loss)
GAAP net loss attributable to PagerDuty,
Inc. common stockholders
$
(15,125
)
$
(32,542
)
$
(51,125
)
$
(103,861
)
Plus: Stock-based compensation
31,828
31,444
94,910
86,478
Plus: Employer taxes related to employee
stock transactions
415
583
2,315
1,756
Plus: Amortization of debt issuance
costs
523
461
1,456
1,376
Plus: Amortization of acquired intangible
assets
2,806
2,628
8,417
7,431
Plus: Acquisition-related expenses
691
902
1,014
4,554
Plus: Restructuring costs
132
—
1,534
—
Plus: Adjustment attributable to
redeemable non-controlling interest
2,364
—
4,093
—
Less: Gain on partial extinguishment of
convertible senior notes
(3,970
)
—
(3,970
)
—
Less: Income tax effect of non-GAAP
adjustments
(466
)
—
(1,920
)
(1,330
)
Non-GAAP net income (loss) attributable to
PagerDuty, Inc. common stockholders
$
19,198
$
3,476
$
56,724
$
(3,596
)
Reconciliation of net income (loss) per
share, basic
GAAP net loss per share, basic,
attributable to PagerDuty, Inc. common stockholders
$
(0.16
)
$
(0.36
)
$
(0.55
)
$
(1.18
)
Non-GAAP adjustments to net loss
attributable to PagerDuty, Inc. common stockholders
0.37
0.40
1.16
1.14
Non-GAAP net income (loss) per share,
basic, attributable to PagerDuty, Inc. common stockholders
$
0.21
$
0.04
$
0.61
$
(0.04
)
Reconciliation of net income (loss) per
share, diluted(1)
GAAP net loss per share, diluted,
attributable to PagerDuty, Inc. common stockholders
$
(0.16
)
$
(0.36
)
$
(0.55
)
$
(1.18
)
Non-GAAP adjustments to net loss
attributable to PagerDuty, Inc. common stockholders
0.36
0.40
1.13
1.14
Non-GAAP net income (loss) per share,
diluted, attributable to PagerDuty, Inc. common stockholders
$
0.20
$
0.04
$
0.58
$
(0.04
)
Weighted-average shares used in
calculating GAAP net loss per share, basic and diluted
93,104
89,285
92,257
88,200
Weighted-average shares used in
calculating non-GAAP net income (loss) per share
Basic
93,104
89,285
92,257
88,200
Diluted
96,235
100,941
100,834
88,200
Note: Certain figures may not sum due to rounding.
(1) On October 13, 2023, the Company provided written notice to
the trustee and the note holders of the 2025 Notes that it had
irrevocably elected to settle the principal amount of its
convertible senior notes in cash and pay or deliver, as the case
may be, cash, shares of common stock or a combination of cash and
shares of common stock, at the Company’s election, in respect to
the remainder, if any, of the Company’s conversion obligation in
excess of the aggregate principal amount of the 2025 Notes being
converted. The company uses the if-converted method to calculate
the non-GAAP net income per diluted share attributable to
PagerDuty, Inc. related to the convertible notes due 2025 prior to
the election on October 13, 2023. As such, approximately 5.8
million shares and 6.7 million shares related to the convertible
notes due 2025 were included in the non-GAAP diluted outstanding
share number for the three and nine months ended October 31, 2023,
respectively, related to the period prior to the election on
October 13, 2023. Similarly, the numerator used to compute this
measure was increased by $0.7 million and $2.5 million for
after-tax interest expense savings related to our convertible notes
for the three and nine months ended October 31, 2023,
respectively.
PagerDuty, Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(in thousands, except
percentages)
(unaudited)
Free Cash Flow
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Net cash provided by (used in) operating
activities
$
16,917
$
(448
)
$
49,819
$
(592
)
Less:
Purchases of property and equipment
(245
)
(815
)
(1,193
)
(3,755
)
Capitalization of internal-use software
costs
(1,441
)
(988
)
(3,812
)
(2,725
)
Free cash flow
$
15,231
$
(2,251
)
$
44,814
$
(7,072
)
Net cash used in investing activities
$
10,887
$
(7,220
)
$
6,875
$
(80,272
)
Net cash provided by (used in) financing
activities
$
54,157
$
(7,965
)
$
53,661
$
(6,084
)
Free cash flow margin
14.0
%
(2.4
)%
14.0
%
(2.6
)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231130934056/en/
Investor Relations Contact: Tony Righetti
investor@pagerduty.com
Press Contact: Debbie O'Brien media@pagerduty.com
SOURCE PagerDuty
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