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PagerDuty (NYSE:PD) Beats Q4 Sales Targets, Stock Jumps 13.4%


Adam Hejl /
2022/03/16 4:15 pm EDT
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IT incident response platform PagerDuty (NYSE:PD) reported Q4 FY2022 results that beat analyst expectations, with revenue up 32.4% year on year to $78.5 million. Guidance for next quarter's revenue was $82.5 million at the midpoint, 2.87% above the average of analyst estimates. PagerDuty made a GAAP loss of $28.8 million, down on its loss of $22.1 million, in the same quarter last year.

Is now the time to buy PagerDuty? Access our full analysis of the earnings results here, it's free.

PagerDuty (PD) Q4 FY2022 Highlights:

  • Revenue: $78.5 million vs analyst estimates of $76 million (3.19% beat)
  • EPS (non-GAAP): -$0.04 vs analyst estimates of -$0.06
  • Revenue guidance for Q1 2023 is $82.5 million at the midpoint, above analyst estimates of $80.1 million
  • Management's revenue guidance for upcoming financial year 2023 is $363 million at the midpoint, beating analyst estimates by 2.94% and predicting 28.9% growth (vs 31.6% in FY2022)
  • Free cash flow was negative $1.38 million, down from positive free cash flow of $1.78 million in previous quarter
  • Customers: 14,865, up from 14,486 in previous quarter
  • Gross Margin (GAAP): 82.2%, down from 84.1% same quarter last year

“Driven by ongoing market traction for our new products and strong go to market execution, Q4 results capped a fiscal year of accelerating growth for PagerDuty. We delivered revenue of $79 million for the quarter and $281 million for the year, both growing 32% year over year, and gained operating leverage which positions us well for durable growth,” said Jennifer Tejada, Chairperson and CEO at PagerDuty.

Started by three former Amazon engineers, PagerDuty (NYSE:PD) is a software as a service platform that helps companies respond to IT incidents fast and make sure that any downtime is minimized.

Software is eating the world, increasing organizations’ reliance on digital-only solutions. As more workloads and applications move to the cloud, the reliability of the underlying cloud infrastructure becomes ever more critical, and ever more complex. To solve the challenge, companies and their engineering teams have turned to a range of cloud monitoring tools that provide them with visibility to troubleshoot the issues in real time.

Sales Growth

As you can see below, PagerDuty's revenue growth has been very strong over the last year, growing from quarterly revenue of $59.2 million, to $78.5 million.

PagerDuty Total Revenue

And unsurprisingly, this was another great quarter for PagerDuty with revenue up 32.4% year on year. On top of that, revenue increased $6.74 million quarter on quarter, a very strong improvement on the $4.22 million increase in Q3 2022, and a sign of re-acceleration of growth.

Guidance for the next quarter indicates PagerDuty is expecting revenue to grow 29.7% year on year to $82.5 million, in line with the 27.7% year-over-year increase in revenue the company had recorded in the same quarter last year. For the upcoming financial year management expects revenue to be $363 million at the midpoint, growing 28.9% compared to 31.6% increase in FY2022.

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Customer Growth

You can see below that PagerDuty reported 14,865 customers at the end of the quarter, an increase of 379 on last quarter. That's about the same customer growth as what we seen last quarter and quite a bit above what we have typically seen over the last year, confirming the company is sustaining a good pace of sales.

PagerDuty Customers

Key Takeaways from PagerDuty's Q4 Results

Since it has still been burning cash over the last twelve months it is worth keeping an eye on PagerDuty’s balance sheet, but we note that with a market capitalization of $2.13 billion and more than $543.3 million in cash, the company has the capacity to continue to prioritise growth over profitability.

It was positive to see PagerDuty's solid revenue guidance for the full year. And we were also glad that the revenue guidance for the next quarter exceeded analysts' expectations. On the other hand, there was a deterioration in gross margin. Overall, this quarter's results seemed pretty positive and shareholders can feel optimistic. The company is up 13.4% on the results and currently trades at $30.51 per share.

Should you invest in PagerDuty right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.