On September 3, 2024, PagerDuty Inc (PD, Financial) released its 8-K filing for the second quarter of fiscal 2025, ended July 31, 2024. PagerDuty Inc is a digital operations management platform that manages urgent and mission-critical work for modern, digital businesses. Its platform harnesses digital signals from virtually any software-enabled system or device and combines it with human response data to take the right actions in real-time. The product offerings of the company include PagerDuty Incident Management, DevOps, AIOPs, Process Automation, and Customer Service Operations.
Performance Overview
PagerDuty Inc reported revenue of $115.9 million for Q2 FY25, reflecting a 7.7% year-over-year increase, closely aligning with the analyst estimate of $116.48 million. The company reported a net loss per share of $0.14, which was better than the analyst estimate of -$0.21. The non-GAAP net income per diluted share was $0.21.
Financial Achievements
The company achieved a non-GAAP operating income of $20.1 million, with a non-GAAP operating margin of 17.3%, marking its eighth consecutive quarter of non-GAAP profitability. This is significant for a software company like PagerDuty Inc, as it demonstrates operational efficiency and the ability to generate profits on an adjusted basis.
Key Financial Metrics
| Metric | Q2 FY25 | Q2 FY24 |
|---|---|---|
| Revenue | $115.9 million | $107.6 million |
| Loss from Operations | -$16.0 million | -$26.2 million |
| Non-GAAP Operating Income | $20.1 million | $14.3 million |
| Net Cash Provided by Operating Activities | $35.8 million | $10.8 million |
| Cash, Cash Equivalents, and Investments | $599.3 million | $571.2 million |
Operational Highlights
PagerDuty Inc reported several operational highlights, including a 10% year-over-year growth in Ending Annual Recurring Revenue (ARR) to $474 million. The company also noted a 6% increase in customers with annual recurring revenue over $100,000, totaling 820 customers. The dollar-based net retention rate was 106%, down from 114% a year ago, indicating some challenges in retaining and expanding existing customer accounts.
Commentary
“PagerDuty delivered a solid second quarter with revenue growth within our guidance range, a non-GAAP operating margin four points above the range, and our eighth consecutive quarter of non-GAAP profitability,” said Jennifer Tejada, Chairperson and CEO, PagerDuty. “We remain confident in ARR growth acceleration as global outages reinforce that incident management has become a CEO priority.”
Financial Outlook
For the third quarter of fiscal 2025, PagerDuty Inc expects total revenue between $115.5 million and $117.5 million, representing a growth rate of 6% to 8% year-over-year. The company also anticipates a non-GAAP net income per diluted share of $0.16 to $0.17. For the full fiscal year 2025, the company has revised its revenue guidance to $463.0 million to $467.0 million, down from the previous range of $471.0 million to $477.0 million, while raising its non-GAAP net income per diluted share guidance to $0.67 to $0.72, up from $0.66 to $0.71.
PagerDuty Inc's performance in Q2 FY25 demonstrates its ability to grow revenue and maintain profitability on a non-GAAP basis, despite challenges in customer retention and expansion. The company's strong cash position and operational efficiency are positive indicators for its future growth and stability in the digital operations management industry.
Explore the complete 8-K earnings release (here) from PagerDuty Inc for further details.
