Fourth quarter revenue increased 10.1% year
over year to $111.1 million
Fourth quarter GAAP operating loss of $33.4
million, non-GAAP operating income of $11.0 million
PagerDuty, Inc. (NYSE:PD), a leader in digital operations
management, today announced financial results for the fourth
quarter of fiscal 2024, ended January 31, 2024.
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“PagerDuty delivered year-over-year revenue growth of 16% and
operating margin expansion of more than 1,200 basis points to
complete a second consecutive year of growing non-GAAP
profitability,” said Jennifer Tejada, Chairperson and CEO,
PagerDuty. “The PagerDuty Operations Cloud continues to gain
traction with enterprise customers seeking to modernize their
operations to deliver seamless customer experiences and services in
real time.”
Fourth Quarter Fiscal 2024 Financial Highlights
- Revenue was $111.1 million, an increase of 10.1% year over
year.
- GAAP operating loss was $33.4 million; GAAP operating margin of
(30.1)%.
- Non-GAAP operating income was $11.0 million; non-GAAP operating
margin of 9.9%.
- GAAP net loss per share attributable to PagerDuty, Inc. common
stockholders was $0.33.
- Non-GAAP net income per diluted share attributable to
PagerDuty, Inc. common stockholders was $0.17.
- Operating cash flow was $22.2 million, with free cash flow of
$19.6 million.
- Cash, cash equivalents and current investments were $571.2
million as of January 31, 2024.
Full Year Fiscal 2024 Financial Highlights
- Revenue was $430.7 million, an increase of 16.2% year over
year.
- GAAP operating loss was $96.2 million; GAAP operating margin of
(22.3)%.
- Non-GAAP operating income was $56.4 million; non-GAAP operating
margin of 13.1%.
- GAAP net loss per share attributable to PagerDuty, Inc. was
$0.89.
- Non-GAAP net income per diluted share attributable to
PagerDuty, Inc. was $0.74.
- Operating cash flow was $72.0 million, with free cash flow of
$64.4 million.
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.
Fourth Quarter and Recent Highlights
- Annual recurring revenue (ARR) grew 10% year over year to
$451.9 million.
- Dollar-based net retention rate of 107% as of January 31, 2024,
compared to 120% in the year ago period.
- Reported 804 customers with ARR over $100,000 as of January 31,
2024, compared to 752 in the year ago period.
- Reported 58 customers with ARR over $1,000,000 as of January
31, 2024, compared to 50 in the year ago period.
- ARR from customers using two or more paid products grew to 62%
as of January 31, 2024, compared to 58% in the year ago
period.
- Total paid customers of 15,039 as of January 31, 2024, compared
to 15,244 in the year ago period.
- Total free and paid customers of more than 28,000 as of January
31, 2024 representing approximately 17% growth year over year.
- Released 2024 State of Digital Operations study, finds 16%
increase in Enterprise incidents amid race to AI adoption.
- Joined BSA | The Software Alliance, the leading advocate for
the enterprise software industry before governments and in the
international marketplace.
- Closed on the acquisition of Jeli, Inc. on November 15, 2023 to
transform operations with an enterprise-grade, all-in-one incident
management solution.
- Appointed Jeff Hausman as Chief Product Development
Officer.
- Appointed Teresa Carlson to Board of Directors.
- Lands and expands include: DaVita, Docusign, JR East
Information Systems Company, Netflix, Nvidia, Palo Alto Networks,
and Workday.
Financial Outlook
For the first quarter of fiscal 2025, PagerDuty currently
expects:
- Total revenue of $110.5 million - $112.5 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 $0.12 - $0.13 assuming
approximately 96 million diluted shares and a non-GAAP tax rate of
23%
For the full fiscal year 2025, PagerDuty currently
expects:
- Total revenue of $470.0 million - $478.0 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 $0.65 - $0.70 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.
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 March 14, 2024.
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 Effects and Adjustments: Based on PagerDuty's
financial outlook for the first quarter and full year fiscal 2025,
PagerDuty is utilizing a projected non-GAAP tax rate of 23%
effective February 1, 2024 in order to provide better consistency
across the interim reporting periods by eliminating the impact of
non-recurring and period specific items, which can vary in size and
frequency. PagerDuty's estimated tax rate on non-GAAP income is
determined annually and may be adjusted during the year to take
into account events or trends that PagerDuty believes materially
impact the estimated annual rate including, but not limited to,
significant changes resulting from tax legislation, material
changes in the geographic mix of revenue and expenses and other
significant events.
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, acquisition-related retention payments,
and gain on partial extinguishment of convertible senior notes,
which are not necessarily reflective of operational performance
during a given period, restructuring costs, adjustment attributable
to redeemable non-controlling interest, and income tax adjustments.
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 and our
Quarterly Reports on Form 10-Qs filed with the SEC on June 2, 2023,
September 1, 2023, and December 1, 2023. Additional information
will be made available in our Annual Report on Form 10-K for the
year ended January 31, 2024 which is expected to be filed with the
Securities and Exchange Commission (SEC) shortly after this release
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.
Consolidated Statements of
Operations
(in thousands, except per share
data)
Three Months Ended January
31,
Year Ended January 31,
2024
2023
2024
2023
Revenue
$
111,117
$
100,966
$
430,699
$
370,793
Cost of revenue(1)
20,358
18,344
77,832
70,434
Gross profit
90,759
82,622
352,867
300,359
Operating expenses:
Research and development(1)
35,548
34,569
139,769
134,876
Sales and marketing(1)
53,614
52,621
196,769
195,622
General and administrative(1)
35,028
21,922
112,575
99,238
Total operating expenses
124,190
109,112
449,113
429,736
Loss from operations
(33,431
)
(26,490
)
(96,246
)
(129,377
)
Interest income
10,801
2,005
22,101
5,383
Interest expense
(2,316
)
(1,361
)
(6,500
)
(5,433
)
Gain on partial extinguishment of
convertible senior notes
(271
)
—
3,699
—
Other expense, net
(3,415
)
1,307
(433
)
(637
)
Loss before benefit from (provision for)
income taxes
(28,632
)
(24,539
)
(77,379
)
(130,064
)
Benefit from (provision for) income
taxes
(185
)
(463
)
12
839
Net loss
$
(28,817
)
$
(25,002
)
$
(77,367
)
$
(129,225
)
Net loss attributable to redeemable
non-controlling interest
(665
)
(440
)
(2,178
)
(802
)
Net loss attributable to PagerDuty,
Inc.
$
(28,152
)
$
(24,562
)
$
(75,189
)
$
(128,423
)
Adjustment attributable to redeemable
non-controlling interest
2,480
—
6,568
—
Net loss attributable to PagerDuty, Inc.
common stockholders
$
(30,632
)
$
(24,562
)
$
(81,757
)
$
(128,423
)
Net loss per share, basic and diluted,
attributable to PagerDuty, Inc. common stockholders
$
(0.33
)
$
(0.27
)
$
(0.89
)
$
(1.45
)
Weighted average shares used in
calculating net loss per share, basic and diluted
92,168
90,269
92,341
88,721
(1) Includes stock-based compensation
expense as follows:
Three Months Ended January
31,
Year Ended January 31,
2024
2023
2024
2023
Cost of revenue
$
1,726
$
1,879
$
7,586
$
6,827
Research and development
10,798
8,946
44,800
39,012
Sales and marketing
7,983
7,271
30,345
29,804
General and administrative
117,735
5,333
44,421
34,264
Total
$
32,242
$
23,429
$
127,152
$
109,907
PagerDuty, Inc.
Consolidated Balance
Sheets
(in thousands)
As of January 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
363,011
$
274,019
Investments
208,178
202,948
Accounts receivable, net of allowance for
credit losses of $1,382 and $2,014 as of January 31, 2024 and
January 31, 2023, respectively
100,413
91,345
Deferred contract costs, current
19,502
18,674
Prepaid expenses and other current
assets
12,094
13,350
Total current assets
703,198
600,336
Property and equipment, net
17,632
18,390
Deferred contract costs, non-current
25,118
27,715
Lease right-of-use assets
3,789
13,982
Goodwill
137,401
118,862
Intangible assets, net
32,616
37,224
Other assets
5,552
1,364
Total assets
$
925,306
$
817,873
Liabilities, redeemable non-controlling
interest, and stockholders’ equity
Current liabilities:
Accounts payable
$
6,242
$
7,398
Accrued expenses and other current
liabilities
15,472
11,804
Accrued compensation
30,239
41,834
Deferred revenue, current
223,522
204,137
Lease liabilities, current
6,180
5,904
Total current liabilities
281,655
271,077
Convertible senior notes, net
448,030
282,908
Deferred revenue, non-current
4,639
4,914
Lease liabilities, non-current
6,809
12,704
Other liabilities
5,280
4,184
Total liabilities
746,413
575,787
Commitments and contingencies
Redeemable non-controlling interest
7,293
1,108
Stockholders’ equity:
Common stock, $0.000005 par value per
share: 1,000,000,000 shares authorized as of January 31, 2024 and
2023; 95,068,187 and 91,178,671 shares issued as of January 31,
2024 and 2023, respectively, and 92,737,185 and 91,178,671 shares
outstanding as of January 31, 2024 and 2023, respectively
—
—
Additional paid-in capital
774,768
719,816
Accumulated other comprehensive loss
(733
)
(1,592
)
Accumulated deficit
(552,435
)
(477,246
)
Treasury stock at cost, 2,331,002 and —
shares as of January 31, 2024 and 2023, respectively
(50,000
)
—
Total stockholders’ equity
171,600
240,978
Total liabilities, redeemable
non-controlling interest, and stockholders’ equity
$
925,306
$
817,873
PagerDuty, Inc.
Consolidated Statements of
Cash Flows
(in thousands)
Three Months Ended January
31,
Year Ended January 31,
2024
2023
2024
2023
Cash flows from operating
activities
Net loss attributable to PagerDuty, Inc.
common stockholders
$
(30,632
)
$
(24,562
)
$
(81,757
)
$
(128,423
)
Net loss and adjustment attributable to
redeemable non-controlling interest
1,815
(440
)
4,390
(802
)
Net loss
(28,817
)
(25,002
)
(77,367
)
(129,225
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
5,137
4,651
20,153
17,429
Amortization of deferred contract
costs
5,282
5,069
20,568
19,247
Gain on partial extinguishment of
convertible senior notes
271
—
(3,699
)
—
Stock-based compensation
32,242
23,429
127,152
109,907
Amortization of debt issuance costs
622
463
2,078
1,839
Non-cash lease expense
1,014
1,160
4,439
4,073
Impairment of property and equipment, net
and lease right-of-use assets, net
7,164
—
8,368
—
Tax benefit related to release of
valuation allowance
—
—
—
(1,330
)
Other
(593
)
155
(3,223
)
1,841
Changes in operating assets and
liabilities:
Accounts receivable
(29,645
)
(19,634
)
(10,662
)
(16,586
)
Deferred contract costs
(6,514
)
(6,482
)
(18,799
)
(22,805
)
Prepaid expenses and other assets
2,674
91
—
(2,843
)
Accounts payable
(451
)
(356
)
(1,453
)
(1,473
)
Accrued expenses and other liabilities
3,378
(94
)
4,145
(1,444
)
Accrued compensation
1,261
6,771
(11,825
)
6,147
Deferred revenue
30,620
29,336
18,073
37,971
Lease liabilities
(1,490
)
(1,985
)
(5,974
)
(5,768
)
Net cash provided by operating
activities
22,155
17,572
71,974
16,980
Cash flows from investing
activities
Purchases of property and equipment
(971
)
(882
)
(2,164
)
(4,637
)
Capitalized internal-use software
costs
(1,572
)
(1,111
)
(5,384
)
(3,836
)
Business acquisition, net of cash
acquired
(24,071
)
—
(24,071
)
(66,262
)
Asset acquisition
—
—
—
(1,845
)
Purchases of available-for-sale
investments
(64,986
)
(56,900
)
(216,970
)
(212,210
)
Proceeds from maturities of
available-for-sale investments
54,200
53,000
218,264
202,625
Purchases of non-marketable equity
investments
—
—
(200
)
—
Net cash (used in) provided by
investing activities
(37,400
)
(5,893
)
(30,525
)
(86,165
)
Cash flows from financing
activities
Proceeds from issuance of convertible
senior notes, net of issuance costs
(712
)
—
390,831
—
Purchases of capped calls related to
convertible senior notes
—
(55,102
)
—
Repurchases of convertible senior
notes
(204
)
—
(223,675
)
—
Investment from redeemable non-controlling
interest holder
—
1,781
1,908
Proceeds from issuance of common stock
upon exercise of stock options
1,481
2,022
9,871
10,481
Proceeds from Employee Stock Purchase
Plan
4,002
4,139
10,294
9,875
Employee payroll taxes paid related to net
share settlement of restricted stock units
(6,628
)
(6,490
)
(32,400
)
(28,677
)
Repurchase of common stock
—
—
(50,000
)
—
Net cash provided by (used in)
financing activities
(2,061
)
(329
)
51,600
(6,413
)
Effects of foreign currency exchange rates
on cash, cash equivalents, and restricted cash
50
336
(401
)
(168
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
(17,256
)
11,686
92,648
(75,766
)
Cash, cash equivalents, and restricted
cash at beginning of period
383,923
262,333
274,019
349,785
Cash, cash equivalents, and restricted
cash at end of period
$
366,667
$
274,019
$
366,667
$
274,019
PagerDuty, Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(in thousands, except
percentages)
(unaudited)
Three Months Ended January
31,
Year Ended January 31,
2024
2023
2024
2023
Reconciliation of gross profit and
gross margin
GAAP gross profit
$
90,759
$
82,622
$
352,867
$
300,359
Plus: Stock-based compensation
1,726
1,879
7,586
6,827
Plus: Employer taxes related to employee
stock transactions
61
84
199
163
Plus: Amortization of acquired intangible
assets
2,354
2,087
8,614
7,401
Plus: Restructuring costs
—
357
137
357
Non-GAAP gross profit
$
94,900
$
87,029
$
369,403
$
315,107
GAAP gross margin
81.7
%
81.8
%
81.9
%
81.0
%
Non-GAAP adjustments
3.7
%
4.4
%
3.9
%
3.9
%
Non-GAAP gross margin
85.4
%
86.2
%
85.8
%
85.0
%
Reconciliation of operating
expenses
GAAP research and development
$
35,548
$
34,569
$
139,769
$
134,876
Less: Stock-based compensation
(10,798
)
(8,946
)
(44,800
)
(39,012
)
Less: Employer taxes related to employee
stock transactions
(468
)
(383
)
(1,398
)
(942
)
Less: Acquisition-related expenses
(354
)
(5
)
(838
)
(3,105
)
Less: Amortization of acquired intangible
assets
(88
)
(87
)
(350
)
(232
)
Less: Restructuring costs
21
(2,004
)
26
(2,004
)
Non-GAAP research and development
$
23,861
$
23,144
$
92,409
$
89,581
GAAP sales and marketing
$
53,614
$
52,621
$
196,769
$
195,622
Less: Stock-based compensation
(7,983
)
(7,271
)
(30,345
)
(29,804
)
Less: Employer taxes related to employee
stock transactions
(330
)
(424
)
(919
)
(892
)
Less: Amortization of acquired intangible
assets
(629
)
(610
)
(2,459
)
(2,546
)
Less: Restructuring costs
—
(2,200
)
49
(2,200
)
Non-GAAP sales and marketing
$
44,672
$
42,116
$
163,095
$
160,180
GAAP general and administrative
$
35,028
$
21,922
$
112,575
$
99,238
Less: Stock-based compensation
(11,735
)
(5,333
)
(44,421
)
(34,264
)
Less: Employer taxes related to employee
stock transactions
(324
)
(449
)
(982
)
(1,099
)
Less: Acquisition-related expenses
(432
)
—
(962
)
(1,454
)
Less: Amortization of acquired intangible
assets
(22
)
(22
)
(87
)
(58
)
Less: Restructuring costs
(7,164
)
(474
)
(8,615
)
(474
)
Non-GAAP general and administrative
$
15,351
$
15,644
$
57,508
$
61,889
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 January
31,
Year Ended January 31,
2024
2023
2024
2023
Reconciliation of operating income
(loss) and operating margin
GAAP operating loss
$
(33,431
)
$
(26,490
)
$
(96,246
)
$
(129,377
)
Plus: Stock-based compensation
32,242
23,429
127,152
109,907
Plus: Employer taxes related to employee
stock transactions
1,183
1,340
3,498
3,096
Plus: Amortization of acquired intangible
assets
3,093
2,806
11,510
10,237
Plus: Acquisition-related expenses
786
5
1,800
4,559
Plus: Restructuring costs
7,143
5,035
8,677
5,035
Non-GAAP operating income (loss)
$
11,016
$
6,125
$
56,391
$
3,457
GAAP operating margin
(30.1
) %
(26.2
) %
(22.3
) %
(34.9
) %
Non-GAAP adjustments
40.0
%
32.3
%
35.4
%
35.8
%
Non-GAAP operating margin
9.9
%
6.1
%
13.1
%
0.9
%
Reconciliation of net income
(loss)
GAAP net loss attributable to PagerDuty,
Inc. common stockholders
$
(30,632
)
$
(24,562
)
$
(81,757
)
$
(128,423
)
Plus: Stock-based compensation
32,242
23,429
127,152
109,907
Plus: Employer taxes related to employee
stock transactions
1,183
1,340
3,498
3,096
Plus: Amortization of debt issuance
costs
622
463
2,078
1,839
Plus: Amortization of acquired intangible
assets
3,093
2,806
11,510
10,237
Plus: Acquisition-related expenses
786
5
1,800
4,559
Plus: Restructuring costs
7,143
5,035
8,677
5,035
Plus: Adjustment attributable to
redeemable non-controlling interest
2,480
—
6,568
—
Less: Gain on partial extinguishment of
convertible senior notes
271
—
(3,699
)
—
Less: Income tax effects and
adjustments
(1,353
)
(1,226
)
(3,273
)
(2,556
)
Non-GAAP net income (loss) attributable to
PagerDuty, Inc. common stockholders
$
15,835
$
7,290
$
72,554
$
3,694
Reconciliation of net income (loss) per
share, basic
GAAP net loss per share, basic,
attributable to PagerDuty, Inc. common stockholders
$
(0.33
)
$
(0.27
)
$
(0.89
)
$
(1.45
)
Non-GAAP adjustments to net loss
attributable to PagerDuty, Inc. common stockholders
0.50
0.35
1.68
1.49
Non-GAAP net income (loss) per share,
basic, attributable to PagerDuty, Inc. common stockholders
$
0.17
$
0.08
$
0.79
$
0.04
Reconciliation of net income (loss) per
share, diluted(1)
GAAP net loss per share, diluted,
attributable to PagerDuty, Inc. common stockholders
$
(0.33
)
$
(0.27
)
$
(0.89
)
$
(1.45
)
Non-GAAP adjustments to net loss
attributable to PagerDuty, Inc. common stockholders
0.50
0.34
1.63
1.52
Non-GAAP net income (loss) per share,
diluted, attributable to PagerDuty, Inc. common stockholders
$
0.17
$
0.07
$
0.74
$
0.04
Weighted-average shares used in
calculating GAAP net loss per share, basic and diluted
92,168
90,269
92,341
88,721
Weighted-average shares used in
calculating non-GAAP net income (loss) per share
Basic
92,168
90,269
92,341
88,721
Diluted
95,192
101,747
100,941
100,862
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 5.0
million shares related to the convertible notes due 2025 were
included in the non-GAAP diluted outstanding share number for the
twelve months ended January 31, 2024, related to the period prior
to the election on October 13, 2023. Similarly, the numerator used
to compute this measure was increased by $- million and $2.5
million for after-tax interest expense savings related to our
convertible notes for the three and twelve months ended January 31,
2024, respectively.
PagerDuty, Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(in thousands, except
percentages)
(unaudited)
Free Cash Flow
Three Months Ended January
31,
Year Ended January 31,
2024
2023
2024
2023
Net cash provided by (used in) operating
activities
$
22,155
$
17,572
$
71,974
$
16,980
Less:
Purchases of property and equipment
(971
)
(882
)
(2,164
)
(4,637
)
Capitalization of internal-use software
costs
(1,572
)
(1,111
)
(5,384
)
(3,836
)
Free cash flow
$
19,612
$
15,579
$
64,426
$
8,507
Net cash used in investing activities
$
(37,400
)
$
(5,893
)
$
(30,525
)
$
(86,165
)
Net cash provided by (used in) financing
activities
$
(2,061
)
$
(329
)
$
51,600
$
(6,413
)
Free cash flow margin
17.6
%
15.4
%
15.0
%
2.3
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240314083746/en/
Investor Relations Contact: Tony Righetti
investor@pagerduty.com
Press Contact: Debbie O'Brien media@pagerduty.com
SOURCE PagerDuty
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