Third quarter revenue increased 9% year over
year to $119 million
Ending ARR grew 10% year over year to $483
million
Third quarter loss from operations was $10
million; non-GAAP operating income was $25 million
PagerDuty, Inc. (NYSE:PD), a leader in digital operations
management, today announced financial results for the third quarter
of fiscal 2025, ended October 31, 2024.
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“PagerDuty delivered a solid quarter with revenue and non-GAAP
operating income results well above third quarter guidance ranges
with annual recurring revenue increasing to $483 million, growing
10% year-over-year,” said Chairperson and CEO, Jennifer Tejada.
“Consistent performance over the past four quarters has led to
stabilization across all business segments, and along with
improving leading indicators, positions the business on a strong
upward trajectory.”
Third Quarter Fiscal 2025 Financial Highlights
- Revenue was $118.9 million, an increase of 9.4% year over
year.
- Loss from operations was $10.3 million; operating margin was
negative 8.7%.
- Non-GAAP operating income was $25.0 million; non-GAAP operating
margin was 21.0%.
- Net loss per share attributable to PagerDuty, Inc. common
stockholders was $0.07.
- Non-GAAP net income per diluted share attributable to
PagerDuty, Inc. common stockholders was $0.25.
- Net cash provided by operating activities was $22.1 million,
with free cash flow of $19.4 million.
- Cash, cash equivalents, and investments were $542.2 million as
of October 31, 2024.
The section titled “Non-GAAP Financial Measures” below contains
a description of the non-GAAP financial measures and
reconciliations between GAAP and non-GAAP financial
information.
Third Quarter and Recent Highlights
- Customers with annual recurring revenue over $100 thousand grew
6% to 825 as of October 31, 2024, compared to 778 a year ago.
- Dollar-based net retention rate was 107% as of October 31,
2024, compared to 110% a year ago.
- Free and paid customers totaled more than 30,000 as of October
31, 2024, representing approximately 11% growth year over
year.
- Total paid customers were 15,050 as of October 31, 2024,
compared to 15,049 a year ago.
- Remaining performance obligations were $405 million as of
October 31, 2024. Of this amount, the Company expects to recognize
revenue of approximately $278 million, or 69%, over the next 12
months with the balance to be recognized as revenue
thereafter.(1)
- Lands and expands include: Alphonso Inc,, CFP Energy Limited,
Cloudflare, Infosys, NVIDIA Corporation, Waste Management Inc., and
Zscaler.
- Announced Jennifer Tejada as guest speaker during the 2024 AWS
re:Invent keynote.
- Introduced enterprise-grade, AI-powered innovations.
- Released Total Economic Impact Study revealing a 249% return on
investment over three years using the PagerDuty Operations
Cloud.
- Recognized as a Leader in 2024 GigaOm Radar for AIOps.
- Showcased PagerDuty customer - Anaplan.
- Recognized by Fortune's Best Workplaces as one of the top 25
companies for women in their small and medium designation.
(1)Beginning in the first quarter of
fiscal 2025, the Company began to include contracts with an
original term of less than 12 months in this disclosure which
comprised $116 million of remaining non-cancelable performance
obligations as of October 31, 2024.
Financial Outlook
For the fourth quarter of fiscal 2025, PagerDuty currently
expects:
- Total revenue of $118.5 million - $120.5 million, representing
a growth rate of 7% - 8% year over year.
- Non-GAAP net income per diluted share attributable to
PagerDuty, Inc. common stockholders of $0.15 - $0.16 assuming
approximately 93 million diluted shares and a non-GAAP tax rate of
23%.
For the full fiscal year 2025, PagerDuty currently expects:
- Total revenue of $464.5 million - $466.5 million (compared to
the previous guidance of $463.0 million - $467.0 million),
representing a growth rate of 8% year over year.
- Non-GAAP net income per diluted share attributable to
PagerDuty, Inc. common stockholders of $0.78 - $0.79 (up from $0.67
- $0.72) assuming approximately 95 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 section titled
"Forward-Looking Statements" below for information on the factors
that could cause our actual results to differ materially from these
forward-looking statements.
PagerDuty has not reconciled forward-looking net loss per share
attributable to PagerDuty, Inc. common stock holders to
forward-looking non-GAAP net income per share attributable to
PagerDuty, Inc. common stockholders because certain items are out
of PagerDuty's control or cannot be reasonably predicted.
Accordingly, such reconciliation is not available without
unreasonable effort.
Conference Call Information
PagerDuty will host a conference call and live webcast (Zoom
meeting ID 975 4160 6140) for analysts and investors at 2:00 p.m.
Pacific Time on November 26, 2024. For audio only, the dial-in
number 1-312-626-6799 may be used. 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.
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
Securities and Exchange Commission (SEC) on March 18, 2024.
Additional information will be made available in our Quarterly
Report on Form 10-Q for the quarter ended October 31, 2024 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 technology 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, Customer
Service Operations and Incident Management with a powerful
generative AI assistant to create a flexible, resilient and
scalable platform to increase innovation velocity, grow revenue,
reduce cost, and mitigate the risk of operational failure. 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.
The PagerDuty Operations Cloud
The PagerDuty Operations Cloud is the platform for
mission-critical, time-critical operations work in the modern
enterprise. Through the power of AI and automation, it detects and
diagnoses disruptive events, mobilizes the right team members to
respond, and streamlines infrastructure and workflows across your
digital operations. The Operations Cloud is essential
infrastructure for revolutionizing digital operations to compete
and win as a modern digital business.
PAGERDUTY, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per share
data)
(unaudited)
Three months ended October
31,
Nine months ended October 31,
2024
2023
2024
2023
Revenue
$
118,946
$
108,720
$
346,053
$
319,582
Cost of revenue(1)
20,268
19,705
59,691
57,474
Gross profit
98,678
89,015
286,362
262,108
Operating expenses:
Research and development(1)
34,267
34,272
106,878
104,221
Sales and marketing(1)
49,272
49,630
148,737
143,155
General and administrative(1)
25,432
25,955
78,800
77,547
Total operating expenses
108,971
109,857
334,415
324,923
Loss from operations
(10,293
)
(20,842
)
(48,053
)
(62,815
)
Interest income(2)
6,912
6,029
21,408
15,242
Interest expense
(2,377
)
(1,454
)
(6,888
)
(4,184
)
Gain on partial extinguishment of
convertible senior notes
—
3,970
—
3,970
Other income (expense), net(2)
346
(834
)
212
(960
)
Loss before (provision for) benefit from
income taxes
(5,412
)
(13,131
)
(33,321
)
(48,747
)
(Provision for) benefit from income
taxes
(715
)
41
(1,335
)
197
Net loss
$
(6,127
)
$
(13,090
)
$
(34,656
)
$
(48,550
)
Net loss attributable to redeemable
non-controlling interest
(203
)
(324
)
(681
)
(1,513
)
Net loss attributable to PagerDuty,
Inc.
$
(5,924
)
$
(12,766
)
$
(33,975
)
$
(47,037
)
Less: Adjustment attributable to
redeemable non-controlling interest
634
2,359
9,881
4,088
Net loss attributable to PagerDuty, Inc.
common stockholders
$
(6,558
)
$
(15,125
)
$
(43,856
)
$
(51,125
)
Weighted average shares used in
calculating net loss per share, basic and diluted
91,438
93,104
92,530
92,257
Net loss per share, basic and diluted,
attributable to PagerDuty, Inc. common stockholders
$
(0.07
)
$
(0.16
)
$
(0.47
)
$
(0.55
)
(1) Includes stock-based compensation
expense as follows:
Three months ended October
31,
Nine months ended October 31,
2024
2023
2024
2023
Cost of revenue
$
1,432
$
1,820
$
4,696
$
5,860
Research and development
11,576
11,128
34,640
34,002
Sales and marketing
7,639
8,094
23,702
22,362
General and administrative
11,126
10,786
34,041
32,686
Total
$
31,773
$
31,828
$
97,079
$
94,910
(2) Includes a reclassification for the
three and nine months ended October 31, 2023 for a portion of other
income to the interest income line item to conform to current
period presentation.
PAGERDUTY, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
(unaudited)
October 31, 2024
January 31, 2024
Assets
Current assets:
Cash and cash equivalents
$
326,440
$
363,011
Investments
215,722
208,178
Accounts receivable, net of allowance for
credit losses of $803 and $1,382 as of October 31, 2024 and January
31, 2024, respectively
75,182
100,413
Deferred contract costs, current
19,632
19,502
Prepaid expenses and other current
assets
17,157
12,094
Total current assets
654,133
703,198
Property and equipment, net
19,573
17,632
Deferred contract costs, non-current
24,167
25,118
Lease right-of-use assets
2,436
3,789
Goodwill
137,401
137,401
Intangible assets, net
23,698
32,616
Other assets
5,346
5,552
Total assets
$
866,754
$
925,306
Liabilities, redeemable non-controlling
interest, and stockholders’ equity
Current liabilities:
Accounts payable
$
7,116
$
6,242
Accrued expenses and other current
liabilities
15,801
15,472
Accrued compensation
34,474
30,239
Deferred revenue, current
214,058
223,522
Lease liabilities, current
3,550
6,180
Convertible senior notes, net, current
57,332
—
Total current liabilities
332,331
281,655
Convertible senior notes, net,
non-current
392,697
448,030
Deferred revenue, non-current
2,659
4,639
Lease liabilities, non-current
6,119
6,809
Other liabilities
4,859
5,280
Total liabilities
738,665
746,413
Redeemable non-controlling interest
16,493
7,293
Stockholders' equity
Common stock
—
—
Additional paid-in capital
699,633
774,768
Accumulated other comprehensive loss
(502
)
(733
)
Accumulated deficit
(586,410
)
(552,435
)
Treasury stock
(1,125
)
(50,000
)
Total stockholders’ equity
111,596
171,600
Total liabilities, redeemable
non-controlling interest, and stockholders' equity
$
866,754
$
925,306
PAGERDUTY, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three months ended October
31,
Nine months ended October 31,
2024
2023
2024
2023
Cash flows from operating
activities:
Net loss attributable to PagerDuty, Inc.
common stockholders
$
(6,558
)
$
(15,125
)
$
(43,856
)
$
(51,125
)
Net loss and adjustment attributable to
redeemable non-controlling interest
431
2,035
9,200
2,575
Net loss
(6,127
)
(13,090
)
(34,656
)
(48,550
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
5,071
5,025
15,526
15,016
Amortization of deferred contract
costs
5,555
5,123
16,261
15,286
Amortization of debt issuance costs
671
523
1,950
1,456
Gain on extinguishment of convertible
senior notes
—
(3,970
)
—
(3,970
)
Stock-based compensation
31,773
31,828
97,079
94,910
Non-cash lease expense
903
1,106
2,538
3,425
Other
(1,387
)
(1,524
)
(3,852
)
(1,426
)
Changes in operating assets and
liabilities:
Accounts receivable
(8,406
)
(5,420
)
24,751
18,983
Deferred contract costs
(5,311
)
(5,520
)
(15,441
)
(12,285
)
Prepaid expenses and other assets
(2,217
)
(1,289
)
(5,079
)
(2,674
)
Accounts payable
(176
)
(757
)
603
(1,002
)
Accrued expenses and other liabilities
(473
)
781
(1,302
)
767
Accrued compensation
4,823
5,706
4,002
(13,086
)
Deferred revenue
(1,070
)
(119
)
(11,386
)
(12,547
)
Lease liabilities
(1,556
)
(1,486
)
(4,505
)
(4,484
)
Net cash provided by operating
activities
22,073
16,917
86,489
49,819
Cash flows from investing
activities:
Purchases of property and equipment
(552
)
(245
)
(1,646
)
(1,193
)
Capitalized internal-use software
costs
(2,078
)
(1,441
)
(5,019
)
(3,812
)
Purchases of available-for-sale
investments
(54,721
)
(43,927
)
(153,121
)
(151,984
)
Proceeds from maturities of
available-for-sale investments
54,250
56,500
147,827
164,064
Proceeds from sales of available-for-sale
investments
—
—
2,237
—
Purchases of non-marketable equity
investments
—
—
—
(200
)
Net cash (used in) provided by investing
activities
(3,101
)
10,887
(9,722
)
6,875
Cash flows from financing
activities:
Proceeds from issuance of convertible
senior notes, net of issuance costs
—
391,543
(403
)
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
Repurchases of common stock
(70,310
)
(50,000
)
(97,523
)
(50,000
)
Proceeds from employee stock purchase
plan
—
—
5,735
6,292
Proceeds from issuance of common stock
upon exercise of stock options
723
973
1,527
8,390
Employee payroll taxes paid related to net
share settlement of restricted stock units
(8,531
)
(9,786
)
(22,659
)
(25,772
)
Net cash (used in) provided by financing
activities
(78,118
)
54,157
(113,323
)
53,661
Effects of foreign currency exchange rates
on cash, cash equivalents, and restricted cash
(86
)
(177
)
(109
)
(451
)
Net change in cash, cash equivalents, and
restricted cash
(59,232
)
81,784
(36,665
)
109,904
Cash, cash equivalents, and restricted
cash at beginning of period
389,234
302,139
366,667
274,019
Cash, cash equivalents, and restricted
cash at end of period
$
330,002
$
383,923
$
330,002
$
383,923
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, non-GAAP operating margin, non-GAAP net income
attributable to PagerDuty, Inc. common stockholders, non-GAAP net
income per share attributable to PagerDuty, Inc. common
stockholders, free cash flow, and free cash flow margin.
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 Company's
convertible senior notes (the "2025 Notes" and the "2028 Notes" or,
collectively, 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
fiscal 2025, PagerDuty is utilizing a projected non-GAAP tax rate
of 23% 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.
Non-GAAP gross profit and non-GAAP gross margin
We define non-GAAP gross profit as gross profit excluding the
following expenses typically included in cost of revenue:
stock-based compensation expense, employer taxes related to
employee stock transactions, amortization of acquired intangible
assets, and restructuring costs. We define non-GAAP gross margin as
non-GAAP gross profit as a percentage of revenue.
Non-GAAP operating expenses
We define non-GAAP operating expenses as operating expenses
excluding stock-based compensation expense, employer taxes related
to employee stock transactions, amortization of acquired intangible
assets, acquisition-related expenses, which include transaction
costs, acquisition-related retention payments, and asset
impairment, and restructuring costs which are not necessarily
reflective of operational performance during a given period.
Non-GAAP operating income and non-GAAP operating margin
We define non-GAAP operating income as loss from operations
excluding stock-based compensation expense, employer taxes related
to employee stock transactions, amortization of acquired intangible
assets, acquisition-related expenses, which include transaction
costs, acquisition-related retention payments, and asset
impairment, and restructuring costs which are not necessarily
reflective of operational performance during a given period. We
define non-GAAP operating margin as non-GAAP operating income as a
percentage of revenue.
Non-GAAP net income attributable to PagerDuty, Inc. common
stockholders
We define non-GAAP net income attributable to PagerDuty, Inc.
common stockholders as 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 asset impairment,
restructuring costs, adjustment attributable to redeemable
non-controlling interest, and income tax adjustments, which are not
necessarily reflective of operational performance during a given
period.
Non-GAAP net income per share, basic and diluted
We define non-GAAP net income per share, basic as non-GAAP net
income attributable to PagerDuty, Inc. common stockholders divided
by weighted average shares outstanding at the end of the reporting
period. We define non-GAAP net income per share, diluted as
non-GAAP net income attributable to PagerDuty, Inc. common
stockholders divided by weighted average diluted shares outstanding
at the end of the reporting period.
Free cash flow and free cash flow margin
We define free cash flow as net cash provided by operating
activities, less cash used for purchases of property and equipment
and capitalization of internal-use software costs. We define free
cash flow margin as free cash flow as a percentage of revenue. In
addition to the reasons stated above, we believe that free cash
flow is useful to investors as a liquidity measure because it
measures our ability to generate or use cash in excess of our
capital investments in property and equipment in order to enhance
the strength of our balance sheet and further invest in our
business and potential strategic initiatives. A limitation of the
utility of free cash flow as a measure of our liquidity is that it
does not represent the total increase or decrease in our cash
balance for the period. We use free cash flow in conjunction with
traditional U.S. GAAP measures as part of our overall assessment of
our liquidity, including the preparation of our annual operating
budget and quarterly forecasts and to evaluate the effectiveness of
our business strategies. There are a number of limitations related
to the use of free cash flow as compared to net cash provided by
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 non-GAAP financial measures to their
most-comparable GAAP financial measures.
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,
2024
2023
2024
2023
Non-GAAP gross profit and non-GAAP
gross margin
Gross profit
$
98,678
$
89,015
$
286,362
$
262,108
Add:
Stock-based compensation
1,432
1,820
4,696
5,860
Employer taxes related to employee stock
transactions
29
21
112
138
Amortization of acquired intangible
assets
2,200
2,087
6,875
6,260
Restructuring costs
—
—
(2
)
137
Non-GAAP gross profit
$
102,339
$
92,943
$
298,043
$
274,503
Revenue
$
118,946
$
108,720
$
346,053
$
319,582
Gross Margin
83.0
%
81.9
%
82.8
%
82.0
%
Non-GAAP gross margin
86.0
%
85.5
%
86.1
%
85.9
%
Non-GAAP operating expenses
Research and development
$
34,267
$
34,272
$
106,878
$
104,221
Less:
Stock-based compensation
11,576
11,128
34,640
34,002
Employer taxes related to employee stock
transactions
173
210
691
930
Acquisition-related expenses
227
161
750
484
Amortization of acquired intangible
assets
—
88
116
262
Restructuring costs
—
—
(2
)
(5
)
Non-GAAP research and development
$
22,291
$
22,685
$
70,683
$
68,548
Sales and marketing
$
49,272
$
49,630
$
148,737
$
143,155
Less:
Stock-based compensation
7,639
8,094
23,702
22,362
Employer taxes related to employee stock
transactions
128
39
463
589
Amortization of acquired intangible
assets
632
610
1,897
1,830
Restructuring costs
—
(1
)
(10
)
(49
)
Non-GAAP sales and marketing
$
40,873
$
40,888
$
122,685
$
118,423
General and administrative
$
25,432
$
25,955
$
78,800
$
77,547
Less:
Stock-based compensation
11,126
10,786
34,041
32,686
Employer taxes related to employee stock
transactions
122
145
463
658
Acquisition-related expenses
—
530
(1
)
530
Amortization of acquired intangible
assets
—
21
29
65
Restructuring costs
—
133
24
1,451
Non-GAAP general and administrative
$
14,184
$
14,340
$
44,244
$
42,157
Note: Certain figures may not sum due to
rounding.
PAGERDUTY, INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES (continued)
(in thousands, except percentages
and per share data)
(unaudited)
Three months ended October
31,
Nine months ended October 31,
2024
2023
2024
2023
Non-GAAP operating income and non-GAAP
operating margin
Loss from operations
$
(10,293
)
$
(20,842
)
$
(48,053
)
$
(62,815
)
Add:
Stock-based compensation
31,773
31,828
97,079
94,910
Employer taxes related to employee stock
transactions
452
415
1,729
2,315
Amortization of acquired intangible
assets
2,832
2,806
8,917
8,417
Acquisition-related expenses
227
691
749
1,014
Restructuring costs
—
132
10
1,534
Non-GAAP operating income
$
24,991
$
15,030
$
60,431
$
45,375
Revenue
$
118,946
$
108,720
$
346,053
$
319,582
Operating margin
(8.7
)%
(19.2
)%
(13.9
)%
(19.7
)%
Non-GAAP operating margin
21.0
%
13.8
%
17.5
%
14.2
%
Non-GAAP net income attributable to
PagerDuty, Inc. common stockholders
Net loss attributable to PagerDuty, Inc.
common stockholders
$
(6,558
)
$
(15,125
)
$
(43,856
)
$
(51,125
)
Add:
Stock-based compensation
31,773
31,828
97,079
94,910
Employer taxes related to employee stock
transactions
452
415
1,729
2,315
Amortization of debt issuance costs
671
523
1,950
1,456
Amortization of acquired intangible
assets
2,832
2,806
8,917
8,417
Acquisition-related expenses
227
691
749
1,014
Restructuring costs
—
132
10
1,534
Gain on extinguishment of convertible
senior notes
—
(3,970
)
—
(3,970
)
Adjustment attributable to redeemable
non-controlling interest
634
2,359
9,881
4,088
Income tax effects and adjustments
(6,310
)
(466
)
(16,402
)
(1,920
)
Non-GAAP net income attributable to
PagerDuty, Inc. common stockholders
$
23,721
$
19,193
$
60,057
$
56,719
Non-GAAP net income per share,
basic
Net loss per share, basic, attributable to
PagerDuty, Inc. common stockholders
$
(0.07
)
$
(0.16
)
$
(0.47
)
$
(0.55
)
Non-GAAP adjustments to net loss
attributable to PagerDuty, Inc. common stockholders
0.33
0.37
1.12
1.16
Non-GAAP net income per share, basic,
attributable to PagerDuty, Inc. common stockholders
$
0.26
$
0.21
$
0.65
$
0.61
Non-GAAP net income per share,
diluted(1)
Net loss per share, diluted, attributable
to PagerDuty, Inc. common stockholders
$
(0.07
)
$
(0.16
)
$
(0.47
)
$
(0.55
)
Non-GAAP adjustments to net loss
attributable to PagerDuty, Inc. common stockholders
0.32
0.36
1.10
1.13
Non-GAAP net income per share, diluted,
attributable to PagerDuty, Inc. common stockholders
$
0.25
$
0.20
$
0.63
$
0.58
Weighted-average shares used in
calculating net loss per share, basic and diluted
91,438
93,104
92,530
92,257
Weighted-average shares used in
calculating non-GAAP net income per share
Basic
91,438
93,104
92,530
92,257
Diluted
94,036
96,235
95,549
100,834
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 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, for the three and nine months ended October 31, 2023,
the numerator used to compute this measure was increased by $0.7
million and $2.5 million, respectively, for after-tax interest
expense savings related to our convertible notes.
PAGERDUTY, INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES (continued)
(in thousands, except
percentages)
(unaudited)
Three months ended October
31,
Nine months ended October 31,
2024
2023
2024
2023
Free cash flow and free cash flow
margin
Net cash provided by investing
activities
$
22,073
$
16,917
$
86,489
$
49,819
Purchases of property and equipment
(552
)
(245
)
(1,646
)
(1,193
)
Capitalization of internal-use software
costs
(2,078
)
(1,441
)
(5,019
)
(3,812
)
Free cash flow
$
19,443
$
15,231
$
79,824
$
44,814
Net cash (used in) provided by investing
activities
$
(3,101
)
$
10,887
$
(9,722
)
$
6,875
Net cash (used in) provided by financing
activities
$
(78,118
)
$
54,157
$
(113,323
)
$
53,661
Revenue
$
118,946
$
108,720
$
346,053
$
319,582
Free cash flow margin
16.3
%
14.0
%
23.1
%
14.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241126811639/en/
Investor Relations Contact: Tony Righetti
investor@pagerduty.com
Media Contact: Debbie O'Brien media@pagerduty.com
SOURCE PagerDuty
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