PagerDuty (NYSE:PD) Posts Q2 Sales In Line With Estimates But Stock Drops 13%
IT incident response platform PagerDuty (NYSE:PD) reported results in line with analysts’ expectations in Q2 CY2024, with revenue up 7.7% year on year to $115.9 million. On the other hand, next quarter’s revenue guidance of $116.5 million was less impressive, coming in 3.1% below analysts’ estimates. It made a non-GAAP profit of $0.21 per share, improving from its profit of $0.18 per share in the same quarter last year.
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PagerDuty (PD) Q2 CY2024 Highlights:
- Revenue: $115.9 million vs analyst estimates of $116.5 million (small miss)
- Adjusted Operating Income: $20.11 million vs analyst estimates of $15.27 million (31.7% beat)
- EPS (non-GAAP): $0.21 vs analyst estimates of $0.17 (24.7% beat)
- The company dropped its revenue guidance for the full year to $465 million at the midpoint from $474 million, a 1.9% decrease
- EPS (non-GAAP) guidance for the full year is $0.70 at the midpoint, roughly in line with what analysts were expecting
- Gross Margin (GAAP): 82.7%, up from 81.6% in the same quarter last year
- Free Cash Flow Margin: 28.7%, up from 24.4% in the previous quarter
- Customers: 15,044, down from 15,120 in the previous quarter
- Billings: $110 million at quarter end, up 7.4% year on year
- Market Capitalization: $1.89 billion
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.
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Sales Growth
As you can see below, PagerDuty’s 22.3% annualized revenue growth over the last three years has been decent, and its sales came in at $115.9 million this quarter.
PagerDuty’s quarterly revenue was only up 7.7% year on year, which might disappoint some shareholders. However, we can see that the company’s revenue grew by $4.76 million quarter on quarter, accelerating from $55,000 in Q1 CY2024.
Next quarter’s guidance suggests that PagerDuty is expecting revenue to grow 7.2% year on year to $116.5 million, slowing down from the 15.4% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 13% over the next 12 months before the earnings results announcement.
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Customer Growth
PagerDuty reported 15,044 customers at the end of the quarter, a decrease of 76 from the previous quarter. That’s slower customer growth than we have seen previously, suggesting that the company’s customer acquisition momentum is slowing.
Key Takeaways from PagerDuty’s Q2 Results
We struggled to find many strong positives in these results as the company dropped its full-year revenue guidance. Overall, this was a mediocre quarter. The stock traded down 13% to $15.91 immediately after reporting.
PagerDuty may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.
