PagerDuty Announces First Quarter Fiscal 2023 Financial Results
PagerDuty, a leader in digital operations management, reported a 34% year-over-year revenue increase for Q1 FY2023, reaching $85.4 million. However, the company faced a GAAP operating loss of $32.5 million and a non-GAAP operating loss of $2.3 million. Despite these losses, PagerDuty's CEO highlighted strong customer loyalty, a dollar-based net retention rate of 126%, and a rise in paid customers to 15,040. The company raised its fiscal year revenue guidance, expecting $364 million - $369 million, indicating potential for continued growth amidst operational challenges.
- 34% year-over-year revenue growth to $85.4 million.
- Increase in total paid customers to 15,040 from 13,918.
- Dollar-based net retention rate rose to 126% from 121%.
- GAAP operating loss of $32.5 million.
- Non-GAAP operating loss of $2.3 million.
- Operating cash flow was negative at $(3.0) million.
First quarter revenue increased
First quarter GAAP operating loss of
“PagerDuty revenue accelerated in Q1, growing
First Quarter Fiscal 2023 Financial Highlights
-
Revenue was
, an increase of$85.4 million 34.3% year over year. -
GAAP operating loss was
; GAAP operating margin of negative$32.5 million 38.0% . -
Non-GAAP operating loss was
; non-GAAP operating margin of negative$2.3 million 2.7% . -
GAAP net loss per share was
; non-GAAP net loss per share was$0.38 .$0.04 -
Operating cash flow was
, with free cash flow of$(3.0) million .$(5.8) million -
Cash, cash equivalents and current investments were
as of$467.5 million April 30, 2022 .
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.
First Quarter and Recent Highlights
-
Total paid customers of 15,040 as of
April 30, 2022 , compared to 13,918 in the year ago period. -
Customers with annual recurring revenue over
was 655 as of$100,000 April 30, 2022 , compared to 458 in the year ago period. -
Dollar-based net retention rate of
126% as ofApril 30, 2022 , compared to121% in the year ago period. -
International revenue was
24% of total revenue as ofApril 30, 2022 , compared to25% in the year ago period. - Released New Products for Automating IT Processes in the Cloud and at Higher Scale.
-
Appointed
Shelley Webb as Senior Vice President, General Counsel, andKatherine Post Calvert as Chief Marketing Officer. - Published the second annual Impact Report.
-
Completed the acquisition of
Catalytic, Inc . - Featured case study: SailPoint.
-
Lands and Expands include: DocuSign, Cisco Systems,
Genentech , Mattel, Shopify, and World Market.
Financial Outlook
For the second quarter of fiscal 2023,
-
Total revenue of
-$87.0 million , representing a growth rate of$89.0 million 29% -32% year over year -
Non-GAAP net loss per share of
-$0.09 assuming approximately 88 million shares$0.08
For the full fiscal year 2023,
-
Total revenue of
-$364.0 million , representing a growth rate of$369.0 million 29% -31% year over year -
Non-GAAP net loss per share of
-$0.21 assuming approximately 89 million shares$0.17
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.
Conference Call Information:
Supplemental Financial and Other Information:
Supplemental financial and other information can be accessed through PagerDuty’s investor relations website at investor.pagerduty.com.
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 loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, and free cash flow.
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,
Stock-based Compensation:
Employer Taxes Related to Employee Stock Transactions:
Amortization of Acquired Intangible Assets:
Acquisition-Related Expenses:
Amortization of Debt Issuance Costs: The imputed interest rate of the Convertible Senior Notes (the "Notes") was approximately
Acquisition-Related Income Tax Benefit:
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.
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
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
Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share data) (unaudited) |
|||||||
|
Three Months Ended |
||||||
|
2022 |
|
2021 |
||||
Revenue |
$ |
85,371 |
|
|
$ |
63,591 |
|
Cost of revenue(1) |
|
15,716 |
|
|
|
10,418 |
|
Gross profit |
|
69,655 |
|
|
|
53,173 |
|
Operating expenses: |
|
|
|
||||
Research and development(1) |
|
31,289 |
|
|
|
20,599 |
|
Sales and marketing(1) |
|
45,552 |
|
|
|
37,234 |
|
General and administrative(1) |
|
25,271 |
|
|
|
16,578 |
|
Total operating expenses |
|
102,112 |
|
|
|
74,411 |
|
Loss from operations |
|
(32,457 |
) |
|
|
(21,238 |
) |
Interest income |
|
548 |
|
|
|
818 |
|
Interest expense |
|
(1,325 |
) |
|
|
(1,317 |
) |
Other expense, net |
|
(790 |
) |
|
|
(616 |
) |
Loss before benefit from (provision for) income taxes |
|
(34,024 |
) |
|
|
(22,353 |
) |
Benefit (provision for) from income taxes |
|
1,204 |
|
|
|
(205 |
) |
Net loss |
$ |
(32,820 |
) |
|
$ |
(22,558 |
) |
Other comprehensive loss |
|
|
|
||||
Unrealized loss on investments |
|
(848 |
) |
|
|
(204 |
) |
Total comprehensive loss |
$ |
(33,668 |
) |
|
$ |
(22,762 |
) |
Net loss per share, basic and diluted |
$ |
(0.38 |
) |
|
$ |
(0.27 |
) |
Weighted-average shares used in calculating net loss per share, basic and diluted |
|
87,127 |
|
|
|
82,915 |
|
(1) Includes stock-based compensation expense as follows: |
|||||||
|
Three Months Ended |
||||||
|
2022 |
|
2021 |
||||
Cost of revenue |
$ |
1,224 |
|
|
$ |
676 |
|
Research and development |
|
8,675 |
|
|
|
4,440 |
|
Sales and marketing |
|
6,381 |
|
|
|
3,954 |
|
General and administrative |
|
8,629 |
|
|
|
4,542 |
|
Total |
$ |
24,909 |
|
|
$ |
13,612 |
|
Condensed Consolidated Balance Sheets (in thousands) (unaudited) |
|||||||
|
As of |
|
As of |
||||
|
(unaudited) |
|
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
273,859 |
|
|
$ |
349,785 |
|
Investments |
|
193,600 |
|
|
|
193,571 |
|
Accounts receivable, net of allowance for doubtful accounts of |
|
60,114 |
|
|
|
75,279 |
|
Deferred contract costs, current |
|
17,060 |
|
|
|
16,672 |
|
Prepaid expenses and other current assets |
|
13,284 |
|
|
|
9,777 |
|
Total current assets |
|
557,917 |
|
|
|
645,084 |
|
Property and equipment, net |
|
17,946 |
|
|
|
18,229 |
|
Deferred contract costs, non-current |
|
26,304 |
|
|
|
26,159 |
|
Lease right-of-use assets |
|
19,082 |
|
|
|
20,227 |
|
|
|
119,262 |
|
|
|
72,126 |
|
Intangible assets, net |
|
43,092 |
|
|
|
23,133 |
|
Other assets |
|
1,092 |
|
|
|
1,490 |
|
Total assets |
$ |
784,695 |
|
|
$ |
806,448 |
|
Liabilities and stockholders’ equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
9,320 |
|
|
$ |
9,505 |
|
Accrued expenses and other current liabilities |
|
14,195 |
|
|
|
13,640 |
|
Accrued compensation |
|
27,769 |
|
|
|
35,327 |
|
Deferred revenue, current |
|
162,893 |
|
|
|
162,881 |
|
Lease liabilities, current |
|
5,741 |
|
|
|
5,637 |
|
Total current liabilities |
|
219,918 |
|
|
|
226,990 |
|
Convertible senior notes, net |
|
281,515 |
|
|
|
281,069 |
|
Deferred revenue, non-current |
|
4,416 |
|
|
|
7,343 |
|
Lease liabilities, non-current |
|
19,415 |
|
|
|
20,912 |
|
Other liabilities |
|
3,273 |
|
|
|
3,159 |
|
Total liabilities |
|
528,537 |
|
|
|
539,473 |
|
Stockholders’ equity: |
|
|
|
||||
Common stock |
|
— |
|
|
|
— |
|
Additional paid-in-capital |
|
639,318 |
|
|
|
616,467 |
|
Accumulated other comprehensive loss |
|
(1,517 |
) |
|
|
(669 |
) |
Accumulated deficit |
|
(381,643 |
) |
|
|
(348,823 |
) |
Total stockholders’ equity |
|
256,158 |
|
|
|
266,975 |
|
Total liabilities and stockholders’ equity |
$ |
784,695 |
|
|
$ |
806,448 |
|
Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) |
|||||||
|
Three Months Ended |
||||||
|
2022 |
|
2021 |
||||
Cash flows from operating activities |
|
|
|
||||
Net loss |
$ |
(32,820 |
) |
|
$ |
(22,558 |
) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
3,591 |
|
|
|
1,972 |
|
Amortization of deferred contract costs |
|
4,465 |
|
|
|
3,250 |
|
Amortization of debt issuance costs |
|
447 |
|
|
|
438 |
|
Stock-based compensation |
|
24,909 |
|
|
|
13,612 |
|
Non-cash lease expense |
|
1,145 |
|
|
|
1,097 |
|
Tax benefit related to release of valuation allowance |
|
(1,330 |
) |
|
|
— |
|
Other |
|
1,754 |
|
|
|
803 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
15,262 |
|
|
|
17,365 |
|
Deferred contract costs |
|
(4,998 |
) |
|
|
(3,732 |
) |
Prepaid expenses and other assets |
|
(1,991 |
) |
|
|
(1,573 |
) |
Accounts payable |
|
57 |
|
|
|
(1,564 |
) |
Accrued expenses and other liabilities |
|
(634 |
) |
|
|
1,932 |
|
Accrued compensation |
|
(7,678 |
) |
|
|
(4,411 |
) |
Deferred revenue |
|
(3,771 |
) |
|
|
(3,916 |
) |
Lease liabilities |
|
(1,393 |
) |
|
|
(1,136 |
) |
Net cash (used in) provided by operating activities |
|
(2,985 |
) |
|
|
1,579 |
|
Cash flows from investing activities |
|
|
|
||||
Purchases of property and equipment |
|
(2,078 |
) |
|
|
(927 |
) |
Capitalization of internal-use software costs |
|
(772 |
) |
|
|
(1,002 |
) |
Business acquisition, net of cash acquired |
|
(66,262 |
) |
|
|
(160 |
) |
Purchases of available-for-sale investments |
|
(41,685 |
) |
|
|
(77,531 |
) |
Proceeds from maturities of available-for-sale investments |
|
40,440 |
|
|
|
67,004 |
|
Net cash used in investing activities |
|
(70,357 |
) |
|
|
(12,616 |
) |
Cash flows from financing activities |
|
|
|
||||
Proceeds from issuance of common stock upon exercise of stock options |
|
3,586 |
|
|
|
2,834 |
|
Employee payroll taxes paid related to net share settlement of restricted stock units |
|
(6,170 |
) |
|
|
(4,930 |
) |
Net cash used in financing activities |
|
(2,584 |
) |
|
|
(2,096 |
) |
Net decrease in cash, cash equivalents, and restricted cash |
|
(75,926 |
) |
|
|
(13,133 |
) |
Cash, cash equivalents, and restricted cash at beginning of period |
|
349,785 |
|
|
|
339,166 |
|
Cash, cash equivalents, and restricted cash at end of period |
$ |
273,859 |
|
|
$ |
326,033 |
|
Reconciliation of GAAP to Non-GAAP Data (in thousands, except percentages and per share data) (unaudited) |
|||||||
|
Three Months Ended |
||||||
|
2022 |
|
2021 |
||||
Reconciliation of gross profit and gross margin |
|
|
|
||||
GAAP gross profit |
$ |
69,655 |
|
|
$ |
53,173 |
|
Plus: Stock-based compensation |
|
1,224 |
|
|
|
676 |
|
Plus: Employer taxes related to employee stock transactions |
|
7 |
|
|
|
26 |
|
Plus: Amortization of acquired intangible assets |
|
1,209 |
|
|
|
280 |
|
Non-GAAP gross profit |
$ |
72,095 |
|
|
$ |
54,155 |
|
GAAP gross margin |
|
81.6 |
% |
|
|
83.6 |
% |
Non-GAAP adjustments |
|
2.8 |
% |
|
|
1.6 |
% |
Non-GAAP gross margin |
|
84.4 |
% |
|
|
85.2 |
% |
|
|
|
|
||||
Reconciliation of operating expenses |
|
|
|
||||
GAAP research and development |
$ |
31,289 |
|
|
$ |
20,599 |
|
Less: Stock-based compensation |
|
(8,675 |
) |
|
|
(4,440 |
) |
Less: Employer taxes related to employee stock transactions |
|
(181 |
) |
|
|
(198 |
) |
Less: Acquisition-related expenses |
|
(1,471 |
) |
|
|
(449 |
) |
Non-GAAP research and development |
$ |
20,962 |
|
|
$ |
15,512 |
|
|
|
|
|
||||
GAAP sales and marketing |
$ |
45,552 |
|
|
$ |
37,234 |
|
Less: Stock-based compensation |
|
(6,381 |
) |
|
|
(3,954 |
) |
Less: Employer taxes related to employee stock transactions |
|
(175 |
) |
|
|
(201 |
) |
Less: Amortization of acquired intangible assets |
|
(633 |
) |
|
|
(595 |
) |
Non-GAAP sales and marketing |
$ |
38,363 |
|
|
$ |
32,484 |
|
|
|
|
|
||||
GAAP general and administrative |
$ |
25,271 |
|
|
$ |
16,578 |
|
Less: Stock-based compensation |
|
(8,629 |
) |
|
|
(4,542 |
) |
Less: Employer taxes related to employee stock transactions |
|
(289 |
) |
|
|
(256 |
) |
Less: Acquisition-related expenses |
|
(1,282 |
) |
|
|
(10 |
) |
Non-GAAP general and administrative |
$ |
15,071 |
|
|
$ |
11,770 |
|
|
|
|
|
||||
Reconciliation of operating loss and operating margin |
|
|
|
||||
GAAP operating loss |
$ |
(32,457 |
) |
|
$ |
(21,238 |
) |
Plus: Stock-based compensation |
|
24,909 |
|
|
|
13,612 |
|
Plus: Employer taxes related to employee stock transactions |
|
652 |
|
|
|
681 |
|
Plus: Amortization of acquired intangible assets |
|
1,842 |
|
|
|
875 |
|
Plus: Acquisition-related expenses |
|
2,753 |
|
|
|
459 |
|
Non-GAAP operating loss |
$ |
(2,301 |
) |
|
$ |
(5,611 |
) |
GAAP operating margin |
|
(38.0 |
) % |
|
|
(33.4 |
) % |
Non-GAAP adjustments |
|
35.3 |
% |
|
|
24.6 |
% |
Non-GAAP operating margin |
|
(2.7 |
) % |
|
|
(8.8 |
) % |
|
|
|
|
||||
Reconciliation of net loss |
|
|
|
||||
GAAP net loss |
$ |
(32,820 |
) |
|
$ |
(22,558 |
) |
Plus: Stock-based compensation |
|
24,909 |
|
|
|
13,612 |
|
Plus: Employer taxes related to employee stock transactions |
|
652 |
|
|
|
681 |
|
Plus: Amortization of debt discount and issuance costs |
|
447 |
|
|
|
438 |
|
Plus: Amortization of acquired intangible assets |
|
1,842 |
|
|
|
875 |
|
Plus: Acquisition-related expenses |
|
2,753 |
|
|
|
459 |
|
Less: Tax benefit associated with acquisition |
$ |
(1,330 |
) |
|
$ |
— |
|
Non-GAAP net loss |
$ |
(3,547 |
) |
|
$ |
(6,493 |
) |
|
|
|
|
||||
Reconciliation of net loss per share, basic and diluted |
|
|
|
||||
GAAP net loss per share, basic and diluted |
$ |
(0.38 |
) |
|
$ |
(0.27 |
) |
Non-GAAP adjustments to net loss |
|
0.34 |
|
|
|
0.19 |
|
Non-GAAP net loss per share, basic and diluted |
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
|
|
|
|
||||
Weighted-average shares used in calculating net loss per share, basic and diluted |
|
87,127 |
|
|
|
82,915 |
|
Note: Certain figures may not sum due to rounding.
Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except percentages and per share data) (unaudited) |
|||||||
Free Cash Flow |
|||||||
|
Three Months Ended |
||||||
|
2022 |
|
2021 |
||||
Net cash (used in) provided by operating activities |
$ |
(2,985 |
) |
|
$ |
1,579 |
|
Less: |
|
|
|
||||
Purchases of property and equipment |
|
(2,078 |
) |
|
|
(927 |
) |
Capitalization of internal-use software costs |
|
(772 |
) |
|
|
(1,002 |
) |
Free cash flow |
$ |
(5,835 |
) |
|
$ |
(350 |
) |
Net cash used in investing activities |
$ |
(70,357 |
) |
|
$ |
(12,616 |
) |
Net cash used in financing activities |
$ |
(2,584 |
) |
|
$ |
(2,096 |
) |
Free cash flow margin |
|
(6.8 |
) % |
|
|
(0.6 |
) % |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220602005862/en/
Investor Relations Contact:
investor@pagerduty.com
SOURCE
Source:
FAQ
What were PagerDuty's Q1 FY2023 revenue results?
What is the guided revenue for PagerDuty for FY2023?
What were the operating losses reported by PagerDuty in Q1 FY2023?
How many total paid customers did PagerDuty have by the end of Q1 FY2023?