PagerDuty (PD) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change. The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system. The power o ...

Two cloud-related stocks are putting pressure on the sector today. Zscaler Inc (NASDAQ:ZS) and PagerDuty Inc (NYSE:PD) are down 16% and 1.5%, respectively, after each company's rather lackluster turn in the earnings confessional. ZS was last seen trading at $161.78, on track for its worst single-session percentage decline since September 2019. Even though the cloud security company reported a top-line beat for the fiscal fourth quarter, its full-year and first-quarter guidance fell short of analyst estimate ...

Michael Vi Investment Thesis IT Operations cloud software company PagerDuty (NYSE:PD) reported its Q2 earnings report for the FY25 fiscal year, which showed some encouraging signs of troubles in its IT Operations software business bottoming. The San Francisco, CA-based cloud software company has endured a difficult transitory period as has the larger cloud software environment as CIOs and CSOs have allocated a higher share of their IT budgets towards GenAI while sidelining software-focused projects in the p ...

Revenue and Customer Metrics - PagerDuty's revenue for the three months ended July 31, 2024, was $115,935 thousand, representing a 7.7% increase from $107,616 thousand in the same period of 2023[142]. - The number of customers as of July 31, 2024, was 15,044, with 820 customers having greater than $100.0 thousand in annual recurring revenue (ARR), compared to 15,146 customers and 773 customers with greater than $100.0 thousand in ARR as of July 31, 2023[135]. - Revenue for the six months ended July 31, 2024, increased by $16.245 million, or 7.7%, to $227.107 million compared to $210.862 million for the same period in 2023[163]. Profitability and Loss - Gross profit for the three months ended July 31, 2024, was $95,855 thousand, resulting in a gross margin of 82.7%, compared to a gross profit of $87,783 thousand and a gross margin of 81.6% in 2023[139]. - The net loss attributable to PagerDuty, Inc. for the three months ended July 31, 2024, was $10,912 thousand, compared to a net loss of $22,053 thousand in the same period of 2023[139]. - Net loss attributable to PagerDuty, Inc. for the six months ended July 31, 2024, was $28.051 million, compared to a net loss of $34.271 million for the same period in 2023[161]. Operating Expenses - Total operating expenses for the three months ended July 31, 2024, were $111,882 thousand, a decrease from $113,956 thousand in the same period of 2023[139]. - Operating expenses for the six months ended July 31, 2024, totaled $225.444 million, an increase of $10.378 million, or 4.8%, compared to $215.066 million for the same period in 2023[161]. - Research and development expenses for the three months ended July 31, 2024, were $35,088 thousand, down from $36,441 thousand in 2023, representing a decrease in percentage of revenue from 33.9% to 30.3%[139]. Research and Development - Research and development expenses for the six months ended July 31, 2024, increased to $72.611 million, representing 32.0% of revenue, compared to $69.949 million, or 33.2% of revenue, for the same period in 2023[161]. - The company expects research and development expenses to generally increase in dollar value as the business grows[147]. Sales and Marketing - Sales and marketing expenses increased to $50,966 thousand for the three months ended July 31, 2024, compared to $49,724 thousand in 2023, representing 44.0% of revenue[139]. - Sales and marketing expenses for the six months ended July 31, 2024, increased to $99.465 million, representing 43.8% of revenue, compared to $93.525 million, or 44.4% of revenue, for the same period in 2023[161]. Interest Income and Expense - Interest income for the three months ended July 31, 2024, was $7,516 thousand, an increase from $5,011 thousand in the same period of 2023[139]. - Interest expense for the three months ended July 31, 2024, increased by $967 thousand, or 69.3%, to $2.363 million compared to $1.396 million for the same period in 2023[153]. - Interest income increased by $5,282,000 or 57.3%, totaling $14,496,000 for the six months ended July 31, 2024, compared to $9,214,000 in the same period of 2023[170]. Cash Flow and Financial Position - The company achieved a net cash provided by operating activities of $64.4 million for the six months ended July 31, 2024, up from $32.9 million in the same period of 2023, representing a 96.5% increase[198]. - Free cash flow for the three months ended July 31, 2024, was $33.3 million, significantly higher than $8.7 million for the same period in 2023, marking an increase of 282.5%[190]. - As of July 31, 2024, PagerDuty had cash and cash equivalents totaling $599.3 million, which is expected to support working capital and capital expenditure requirements for at least the next 12 months[192]. Share Repurchase and Debt - The company repurchased a total of 1,313,248 shares under its 2024 Share Repurchase Program, with $72.0 million remaining available for future repurchases as of July 31, 2024[195]. - Total debt obligations as of July 31, 2024, amounted to $449.3 million, with $57.2 million classified as short-term[196]. Deferred Revenue - Deferred revenue as of July 31, 2024, stood at $217.9 million, with $214.5 million expected to be recognized as revenue in the next 12 months[194].

PagerDuty (PD) came out with quarterly earnings of $0.21 per share, beating the Zacks Consensus Estimate of $0.16 per share. This compares to earnings of $0.19 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 31.25%. A quarter ago, it was expected that this software developer would post earnings of $0.13 per share when it actually produced earnings of $0.17, delivering a surprise of 30.77%. Over the last four quarters, the comp ...

Financial Performance - Second quarter revenue increased 8% year over year to $116 million, with a non-GAAP operating income of $20 million and a non-GAAP operating margin of 17.3%[1] - Ending annual recurring revenue (ARR) grew 10% year over year to $474 million, with customers generating over $100 thousand in ARR increasing by 6% to 820[3] - Revenue for Q2 2024 reached $115.935 million, a 7.3% increase from $107.616 million in Q2 2023[11] - For Q3 fiscal 2025, total revenue is expected to be between $115.5 million and $117.5 million, representing a growth rate of 6% to 8% year over year[4] - For the full fiscal year 2025, total revenue is projected to be between $463.0 million and $467.0 million, reflecting a growth rate of 7% to 8% year over year[4] - Revenue for the three months ended July 31, 2024, was $115,935,000, representing a 7.3% increase from $107,616,000 for the same period in 2023[28] Customer Metrics - The dollar-based net retention rate was 106% as of July 31, 2024, down from 114% a year ago[3] - Total paid customers were 15,044, a slight decrease from 15,146 a year ago, while free and paid customers totaled over 29,000, representing approximately 12% growth year over year[3] Profitability and Income - Non-GAAP net income per diluted share for the full fiscal year 2025 is expected to be between $0.67 and $0.72, an increase from previous guidance[4] - Net loss attributable to PagerDuty, Inc. common stockholders for Q2 2024 was $13.242 million, a decrease from $23.782 million in Q2 2023, representing a 44% improvement[11] - PagerDuty reported a net loss of $11,184,000 for the three months ended July 31, 2024, compared to a net loss of $22,622,000 for the same period in 2023, representing a 50.7% improvement[13] - Non-GAAP net income attributable to common stockholders for the three months ended July 31, 2024, was $20,331,000, compared to $18,228,000 for the same period in 2023[28] Cash Flow and Assets - The company generated $35,769,000 in net cash provided by operating activities for the three months ended July 31, 2024, significantly up from $10,750,000 in the same period last year[13] - Cash and cash equivalents increased to $385.673 million from $363.011 million as of January 31, 2024, indicating a positive cash flow trend[12] - Cash, cash equivalents, and restricted cash at the end of the period totaled $389,234,000, up from $302,139,000 at the end of the same period last year, reflecting a 28.8% increase[13] - Free cash flow for the three months ended July 31, 2024, was $33,283,000, up from $8,738,000 in the same period of 2023, indicating a strong increase in cash generation[30] Expenses - Research and development expenses for Q2 2024 were $35.088 million, a slight decrease from $36.441 million in Q2 2023[11] - Sales and marketing expenses increased to $50.966 million in Q2 2024 from $49.724 million in Q2 2023, reflecting ongoing investment in growth[11] - Stock-based compensation expenses amounted to $32,366,000 for the three months ended July 31, 2024, compared to $35,537,000 for the same period in 2023, indicating a decrease of 6.1%[13] Balance Sheet - Total current assets as of July 31, 2024, were $700.476 million, slightly down from $703.198 million as of January 31, 2024[12] - Total liabilities decreased to $735.260 million from $746.413 million, showing a reduction in overall debt[12] - Total stockholders' equity decreased to $164.684 million from $171.600 million, primarily due to accumulated deficit adjustments[12] Strategic Initiatives - Expanded generative AI solutions with PagerDuty Advance to enhance operational resilience and mitigate risks of outages[3] - Engaged with hundreds of customers during PagerDuty on Tour in major cities to promote the PagerDuty Operations Cloud[3] - The company plans to continue investing in strategic initiatives to enhance its balance sheet and support future growth[25] Non-GAAP Measures - The company reported a non-GAAP net income attributable to common stockholders, which excludes stock-based compensation and other adjustments, to provide a clearer view of operational performance[24] - The company emphasizes the importance of non-GAAP financial measures for investors to assess operational performance and comparability with past results[15] - The company emphasizes the importance of reviewing GAAP financial measures alongside non-GAAP measures for a comprehensive evaluation of its business performance[26]

We Are While US markets have rallied to new high after new high in recent years, obviously not every stock has participated. One name that's significantly underperformed is digital operations management company PagerDuty (NYSE:PD). Shares have lost more than 42% over the past five years, and even more from their 2021 peak, as revenue growth rates have dropped and revenue estimates have come down meaningfully. In a little more than a week, the company will report quarterly results, with a bit of pressure on ...

One thing you can say about Cathie Wood is that she's persistent. The aggressive growth investor who's also the co-founder, CEO, and ace stock picker at Ark Invest enjoys swinging the fences. She's also not afraid to go for the safe single, binge-buying some of her favorite holdings over and over again. She publishes Ark Invest's transactions at the end of every market day. Something out of the ordinary happened on Friday night, as she announced her purchases from earlier in the day. PagerDuty (PD 0.75%) wa ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________ FORM 10-Q _________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Title of each class Trading symbol(s) Name of each exchange on which registered Common Stock, $0.00 ...

Financial Data and Key Metrics Changes - Annual recurring revenue (ARR) increased by approximately $11 million to $463 million, with growth stabilizing at 10% for the second consecutive quarter [3][26] - Revenue for the quarter was $111 million, representing an 8% year-over-year increase, and non-GAAP operating margin was 14%, exceeding guidance [36][54] - Gross margin for Q1 was 86%, at the high end of the target range of 84% to 86% [27] - Cash from operations was $29 million, or 26% of revenue, with free cash flow at $27 million, or 24% of revenue [56] Business Line Data and Key Metrics Changes - The contribution from international markets was 27% of total revenues, a slight decrease from 28% in the previous year [54] - Customers spending over $100,000 in ARR grew to 811, up 6% from a year ago, while cohorts at the $500,000 and $1 million marks each grew in the high teens [77][55] - More than 60% of net new ARR for the quarter came from customers investing in products beyond incident management, such as AIOps and Automation [38] Market Data and Key Metrics Changes - The company is seeing stabilization in its enterprise business outside North America, with several six-figure contracts across EMEA and APJ [15][25] - The company ended the quarter with $593 million in cash, cash equivalents, and investments [28] Company Strategy and Development Direction - The company is focused on expanding into the Global 2000 and building a strong multiquarter pipeline, with confidence in accelerating ARR growth in FY'25 [22][30] - The introduction of a new enterprise plan for incident management aims to consolidate offerings and improve customer engagement [39] - The company is enhancing its public sector business, having obtained Authority to Operate from the Department of Veteran Affairs, and is focused on maximizing opportunities in this vertical [49][21] Management's Comments on Operating Environment and Future Outlook - Management noted that the macro environment has created pressure on gross retention, particularly in the SMB segment, but there is continued improvement in large deal execution [8] - The company expects revenue growth of 7% to 9% for Q2 FY'25, with net income per diluted share projected between $0.16 and $0.17 [29][80] - Management expressed confidence in the ability to accelerate ARR growth in the second half of the year, driven by a stronger multiproduct pipeline and improved customer engagement [32][30] Other Important Information - The company announced a share repurchase program for up to $100 million of common stock, reflecting its intent to manage dilution and increase shareholder value [58] - The company has shifted from pure seat-based licensing to flexible pricing and contracting models to reduce friction for customers [41] Q&A Session Summary Question: What are the drivers of acceleration in the second half given the difficult macro backdrop? - Management highlighted the importance of a strong multiquarter pipeline and the shift towards larger deals taking longer to close, which provides better visibility for future growth [32] Question: What is the focus on customer acquisition given the challenges in the SMB segment? - Management emphasized a focused approach on enterprise customers, refining the narrative around operational efficiency and ROI to drive customer engagement [70] Question: How is the company addressing the federal market opportunity? - Management acknowledged the early stages of engagement in the federal market, emphasizing the need for modernization and addressing technical debt within government agencies [66] Question: What is the impact of new licensing types and consumption elements on revenue models? - Management noted that as more business comes from enterprise and larger deals, there is a shift in seasonality dynamics, with larger purchases often occurring towards the end of quarters [134]