PagerDuty (NYSE:PD) Tanks after Q2 Numbers
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PagerDuty (NYSE:PD) Tanks after Q2 Numbers

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Despite better-than-anticipated second-quarter numbers, PagerDuty shares are under pressure today after its dollar-based net retention rate declined over the prior year.

PagerDuty (NYSE:PD) shares are down by double-digits today after the digital operations management services provider announced its second-quarter numbers. Revenue for the quarter increased by 19.2% year-over-year, reaching $107.6 million, and surpassed expectations by nearly $2.7 million. Furthermore, the EPS of $0.19 handily beat estimates by $0.08.

In Q2, the number of customers with annual recurring revenue of over $100,000 rose by 12% to 773. Furthermore, PagerDuty’s annual recurring revenue surged by 17% to $431 million. However, its dollar-based net retention rate declined to 114% from 124% in the year-ago period.

PagerDuty has introduced new products in its enterprise customer segment and expanded its generative AI solutions with AI-generated runbooks that can lead to cost optimization and efficiency for its customers.

Looking ahead to the third quarter, PagerDuty expects revenue to range from $106.5 million to $108.5 million, with an expected EPS range of $0.13 to $0.14. For the full year, the company expects revenue between $426 million and $430 million, along with an EPS range of $0.60 and $0.65.

Today, RBC Capital’s Dan Bergstrom has reiterated a Buy rating on the stock, with a $32 price target. Overall, the Street has a consensus price target of $31.33 for PagerDuty, along with a Moderate Buy consensus rating.  

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