Shares of PagerDuty (NYSE: PD) tanked in pre-market trading at the time of publishing on Friday after the cloud-computing company slashed its revenue outlook. Looking forward, the company now expects FY24 revenue in the range of $425 million to $430 million, down from its prior forecast between $446 million and $452 million, indicating a growth rate of 15% to 16% year over year.
Adjusted earnings in FY24 are projected to be between $0.60 and $0.65 per share (up from its prior forecast of $0.45 and $0.50 per share). In the second quarter, PagerDuty has forecasted revenues between $103.5 million and $105.5 million while adjusted earnings are anticipated to be in the range of $0.10 to $0.11 per share.
The company’s management stated on its Q1 earnings call, “In updating our guidance, we have factored in continued macroeconomic volatility manifested in constrained buying behavior, which leads to longer sales cycles and smaller than historical purchases.”
In Q1, PagerDuty generated revenues of $103.2 million, up by 20.9% year over year versus consensus estimates of $103.3 million. Adjusted earnings in the first quarter came in at $0.20 per share versus a loss of $0.04 per share in the same period last year and exceeded consensus estimates of $0.09 per share.
Analysts are bullish about PD stock with a Strong Buy consensus rating based on six Buys and one Hold.
