UPDATED 20:49 EDT / SEPTEMBER 02 2021

CLOUD

PagerDuty’s stock soars as it posts solid earnings beat and lifts full-year guidance

Incident response software firm PagerDuty Inc. is flying high today, its stock up more than 13% after reporting a smaller-than-expected loss and impressive revenue growth. The company also lifted its full-year outlook.

PagerDuty reported a second-quarter loss before certain costs such as stock compensation of 13 cents per share on revenue of $67.5 million, up 33% from the year-ago period. Wall Street had been looking for a bigger loss of 15 cents per share on revenue of just $65.56 million.

PagerDuty is in the so-called observability business, selling a cloud monitoring platform that’s used to notify developers and engineers of any technical issues with their applications and the infrastructure they run on. The company’s toolbox can be used to troubleshoot any issues that are found as quickly as possible, helping companies avoid any downtime.

Company Chief Executive Jennifer Tejada (pictured) described the second quarter as an “inflection point” for the company, where it showed its increasing market share leadership and the long-term potential of the platform it’s building.

“Our solid topline beat was driven by accelerating demand for both our new Automation offering and our comprehensive Digital Operations plan, especially in the enterprise and mid-market segments,” Tejada added. “Nearly 18,000 companies now run on our platform.”

PagerDuty’s strong revenue growth helped to offset a few less impressive numbers, at least in the minds of investors. The company’s gross margin fell by three percentage points to 84.2%, while free cash flow worsened to an outflow of $12.9 million, and its adjusted net loss of 13 cents per share was three-times higher than the 4 cent per share loss it posted in the same quarter a year ago.

For investors though it seems they’re betting on PagerDuty’s growth potential. The company did a good job of landing high-profile clients in the quarter, including Citigroup Inc., Alkeon Capital Management LLC, EnterpriseDB Corp., Via Varejo S.A. and Selfridges & Co. It now counts more than 18,000 paying customers, officials said.

PaerDuty also announced expanded deals with existing customers including Nvidia Corp., Datadog Inc. and Snowflake Inc.

The company held its annual Summit21 event during the quarter, announcing a new add-on product to its platform that helps responders diagnose and respond to problems with their applications in real time. It also debuted a new, higher-tier subscription plan and more features around service mapping, change intelligence and root cause analysis.

For the next quarter, PagerDuty said it’s expecting revenue of between $69 million and $71 million, with a loss of between 10 cents and 9 cents per share. That compares with Wall Street’s forecast of a 9 cent loss on $68.29 million in revenue.

For the full year, PagerDuty revised its guidace upwards, saying it expects total revenue of $273 million to $276 million. The analyst consensus sits at $270.45 million.

Tejada appeared on theCUBE, SiliconANGLE’s livestreaming studio, during the Summit21 event, where she talked about the company’s ambitions to become the enterprise standard for operations management in an increasingly digital world:

Photo: SiliconANGLE

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