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Pagerduty, Inc. (PD)
:PD
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PagerDuty
(NYSE:PD)
59Neutral
Positive Factors
Financial Performance
PagerDuty reported fourth-quarter results that outperformed consensus on most key metrics.
Product Innovation
The latest release of the Operations Cloud Platform includes new AI functionality to help enterprises solve high-impact, mission-critical issues, allowing organizations to redeploy resources towards higher-value work.
Stock Buyback
The company is initiating a $150 million stock buyback, reflecting management's confidence in the business.
Negative Factors
Growth Momentum
Billings growth was lower than management's prior expectation, showing potential issues with growth momentum.
Revenue Guidance
FY26 revenue guidance is below expectations, indicating challenges ahead.
Sales Execution
Management noted that sales execution remains below its expectations and that it is focused on improving productivity heading into fiscal 2026.
PagerDuty (PD) vs. S&P 500 (SPY)
Market Cap
$1.34B
Dividend YieldN/A
Average Volume (3M)1.47M
Price to Earnings (P/E)―
Beta (1Y)1.44
Revenue Growth8.54%
EPS Growth33.36%
CountryUS
Employees1,242
SectorTechnology
Sector Strength46
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.59
Shares Outstanding91,084,460
10 Day Avg. Volume1,466,228
30 Day Avg. Volume1,470,852
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.68
Price to Cash Flow (P/CF)13.70
P/FCF Ratio15.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$20.29Price Target Upside37.65% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
PagerDuty Business Overview & Revenue Model
Company DescriptionPagerDuty, Inc. operates a digital operations management platform in the United States, Japan, and internationally. Its digital operations management platform collects data digital signals from virtually any software-enabled system or device, and leverage powerful machine learning to correlate, process, and predict opportunities and issues. It serves various industries, including software and technology, telecommunications, retail, travel and hospitality, media and entertainment, and financial services. PagerDuty, Inc. was founded in 2009 and is headquartered in San Francisco, California.
How the Company Makes MoneyPagerDuty makes money primarily through a subscription-based revenue model. The company offers various service plans that cater to different levels of organizational needs, ranging from small teams to large enterprises. Customers pay recurring fees based on the number of users, the specific features they require, and the level of customization and support needed. Additionally, PagerDuty generates revenue from professional services, which include training, implementation, and consulting services to help organizations optimize the use of its platform. Significant partnerships with cloud providers and integration with various IT service management tools enhance its offerings, potentially contributing to its revenue growth.
PagerDuty Financial Statement Overview
Summary
PagerDuty exhibits robust revenue growth and effective cash flow management, which are key strengths. However, profitability remains an area of concern, with negative profit margins and returns on equity. The high debt-to-equity ratio underscores potential financial risk, indicating a need for improvement in financial leverage and profitability to ensure long-term stability.Income Statement
PagerDuty has shown a consistent increase in total revenue, with a TTM revenue growth rate of 8.54% over the previous year. However, profitability remains a challenge, as indicated by a negative TTM net profit margin of -11.51% and a negative EBIT margin of -12.73%. The gross profit margin remains strong at 82.95%, reflecting efficient cost management relative to revenue.65
Positive
Balance Sheet
The company's financial stability is mixed. While there is a high debt-to-equity ratio of 3.57, indicating heavy reliance on debt financing, the equity ratio of 14.00% suggests limited equity funding. ROE is negative at -41.46%, reflecting challenges in generating returns for shareholders.55
Neutral
Cash Flow
PagerDuty has demonstrated strong cash flow management with a significant increase in free cash flow, showing a growth rate of 74.11% over the previous year. The operating cash flow to net income ratio of 2.19 indicates efficient cash generation from operations, despite a negative free cash flow to net income ratio of 2.08.75
Positive
| Breakdown | ||||
| Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 467.50M | 430.70M | 370.79M | 281.40M | 213.56M | Gross Profit |
| 387.83M | 352.87M | 300.36M | 233.03M | 182.87M | EBIT |
| -59.77M | -96.25M | -129.38M | -101.71M | -66.28M | EBITDA |
| -14.52M | -52.80M | -107.20M | -93.36M | -57.57M | Net Income Common Stockholders |
| -42.73M | -81.76M | -129.22M | -107.45M | -68.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 570.83M | 571.19M | 476.97M | 543.36M | 560.28M | Total Assets |
| 927.27M | 925.31M | 817.87M | 806.45M | 795.44M | Total Debt |
| 463.65M | 461.02M | 301.52M | 307.62M | 249.33M | Net Debt |
| 117.19M | 98.01M | 27.50M | -42.17M | -89.83M | Total Liabilities |
| 779.22M | 746.41M | 575.79M | 539.47M | 428.72M | Stockholders Equity |
| 129.83M | 171.60M | 240.98M | 266.98M | 366.73M |
| Cash Flow | Free Cash Flow | |||
| 115.10M | 64.43M | 8.51M | -12.83M | 5.25M | Operating Cash Flow |
| 117.89M | 71.97M | 16.98M | -6.02M | 10.10M | Investing Cash Flow |
| -19.97M | -30.52M | -86.17M | 17.38M | -49.32M | Financing Cash Flow |
| -116.14M | 51.60M | -6.41M | -736.00K | 254.37M |
PagerDuty Technical Analysis
Negative
14.74
Price Trends
17.65
Negative
18.46
Negative
18.80
Negative
Market Momentum
-0.84
Positive
34.69
Neutral
25.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PD, the sentiment is Negative. The current price of 14.74 is below the 20-day moving average (MA) of 17.01, below the 50-day MA of 17.65, and below the 200-day MA of 18.80, indicating a bearish trend. The MACD of -0.84 indicates Positive momentum. The RSI at 34.69 is Neutral, neither overbought nor oversold. The STOCH value of 25.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PD.
PagerDuty Risk Analysis
PagerDuty disclosed 66 risk factors in its most recent earnings report. PagerDuty reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
PagerDuty Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.45B | 20.25 | 15.57% | 2.19% | 5.40% | 14.68% | |
75 Outperform | $1.83B | 15.65 | 18.83% | ― | 8.74% | 150.66% | |
64 Neutral | $1.14B | ― | -39.88% | ― | 21.66% | 8.66% | |
61 Neutral | $1.42B | ― | -9.55% | ― | 11.92% | 39.34% | |
61 Neutral | $1.26B | ― | -6.36% | ― | 4.18% | 27.11% | |
59 Neutral | $1.34B | ― | -36.13% | ― | 8.54% | 33.36% | |
58 Neutral | $11.04B | 9.83 | -6.56% | 3.16% | 7.59% | -10.43% |
* Technology Sector Average
Performance Comparison
PD
PagerDuty
14.74
-5.87
-28.48%
SPNS
Sapiens
25.99
-3.04
-10.47%
SPT
Sprout Social
19.64
-31.34
-61.48%
JAMF
Jamf Holding
10.82
-7.78
-41.83%
CXM
Sprinklr
7.10
-4.24
-37.39%
MLNK
MeridianLink
16.49
-0.72
-4.18%
PagerDuty Earnings Call Summary
Earnings Call Date: Mar 13, 2025 | % Change Since: -5.57% | Next Earnings Date: May 29, 2025
Earnings Call Sentiment Neutral
PagerDuty's earnings call demonstrated strong operational metrics, ongoing platform innovation, and significant enterprise customer growth. However, challenges were noted in revenue performance and sales execution, impacting growth expectations. Despite these challenges, strategic measures and platform enhancements provide optimism for future growth.Highlights
Third Consecutive Year of Non-GAAP Profitability
PagerDuty delivered its third consecutive year of non-GAAP profitability, showcasing the strength and durability of its business model.
Revenue and ARR Growth
Achieved 9% annual growth in both revenue and Annual Recurring Revenue (ARR), with a total ARR of $494 million.
Expansion in Operating and Cash Flow Margins
Non-GAAP operating margin expanded by nearly 500 basis points to 18%, and free cash flow margin increased from 15% to 23%.
Enterprise Customer Growth
72 customers now exceed $1 million in ARR, and 849 customers invest more than $100,000 annually. ARR from customers spending over $100,000 grew 12% year-on-year.
AI and Automation Adoption
AIOps, automation, and customer service operations maintained over 40% contribution to incremental ARR for two consecutive quarters.
Platform Innovation with New AI Capabilities
Launched new PagerDuty AI agents with specialized functions, enhancing intelligent operations and automation capabilities.
Strong Customer Wins and Expansions
Significant enterprise-wide commitments from large financial institutions and other major enterprises, demonstrating the value of PagerDuty's platform.
Share Repurchase Program
Announced a new $150 million share repurchase program, highlighting confidence in the financial plan and free cash flow durability.
Lowlights
Revenue Performance Below Initial Expectations
Revenue performance did not meet initial expectations due to go-to-market execution challenges and a volatile macro environment.
Sales Execution Challenges
The transformation to an enterprise-focused top-down value selling motion created near-term pressure on growth.
Go-to-Market Transition Delays
The transition to a new go-to-market approach has not scaled across the entire enterprise organization at the anticipated pace.
Decreased Dollar-Based Net Retention
Delivered 106% dollar-based net retention, fractionally below the expectation for the full fiscal year.
Company Guidance
During the call, PagerDuty provided a comprehensive overview of its fiscal year 2025 performance, highlighting key financial metrics and strategic initiatives. The company achieved a 9% annual growth in both revenue and Annual Recurring Revenue (ARR), with total ARR reaching $494 million. The non-GAAP operating margin expanded by nearly 500 basis points to 18%, and the free cash flow margin increased from 15% to 23%. In Q4 alone, PagerDuty generated $121 million in revenue, exceeding guidance ranges, and added $11 million in incremental ARR. The company emphasized its strategic focus on enterprise sales transformation and reported that multiproduct customers now drive 65% of total ARR, with 72 customers exceeding $1 million in ARR. Additionally, ARR from customers spending over $100,000 grew 12% year-on-year, accounting for 71% of total ARR. Looking forward, PagerDuty is targeting further ARR growth through optimizing field organization efficiency, new platform monetization strategies, and building momentum in the commercial segment. The company remains focused on a $50 billion total addressable market, driven by organizations' digital operations modernization efforts. For fiscal year 2026, PagerDuty is guiding revenue in the range of $500 million to $507 million, with an operating margin between 19% and 20%.PagerDuty Corporate Events
Executive/Board Changes
PagerDuty Announces Leadership Changes in Legal Department
Neutral
Feb 3, 2025
On January 31, 2025, Shelley Webb, Chief Legal & People Officer of PagerDuty, Inc., announced her resignation effective February 3, 2025. In response, Kathy Chi, Vice President and Deputy General Counsel, will assume the role of interim General Counsel. Webb will receive her annual bonus under the company’s Short-Term Incentive Program, contingent on the achievement of performance goals.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.