PagerDuty(PD) - 2025 Q2 - Quarterly Results

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]