PagerDuty (PD) Q3 Earnings Beat Estimates, Revenues Up Y/Y
PagerDuty PD reported non-GAAP earnings of 20 cents per share in third-quarter fiscal 2024, beating the Zacks Consensus Estimate of 13 cents. It reported earnings of 4 cents per share in the year-ago quarter.
Revenues of $108.7 million increased 15.4% on a year-over-year basis, primarily driven by strong expansion in the enterprise and mid-market. The figure beat the consensus estimate for revenues by 1.65%.
International revenues contributed 27% to total revenues.
Annual recurring revenues (ARR) increased 13% year over year to $438.9 million.
PagerDuty Price, Consensus and EPS Surprise
PagerDuty price-consensus-eps-surprise-chart | PagerDuty Quote
Customer Growth Aids the Top Line
PagerDuty continued to see strength in the enterprise and mid-market, with a total dollar-based net retention rate of 110% as of Oct 31, 2023.
As of Oct 31, the total number of customers, combining free and paid subscriptions, exceeded 27,000, up approximately 18% year over year.
PD closed the fiscal third quarter with 15,049 total paid customers as of Oct 31, 2023, compared with 15,265 at the end of the year-ago period.
Customers with ARR of more than $100,000 were 778 as of Oct 31, 2023, compared with 710 in the year-ago period.
Quarter Details
In third-quarter fiscal 2024, non-GAAP gross profit rose 16% year over year to $92.9 million. Gross margin expanded 50 basis points to 85.5%.
Non-GAAP research & development expenses declined 2.3% year over year to $22.7 million.
Non-GAAP sales & marketing expenses rose 6.7% year over year to $40.9 million.
Non-GAAP general & administrative expenses declined 7.9% from the year-ago quarter’s figure to $14.3 million.
Non-GAAP operating income was $15 million compared with the year-ago quarter’s operating income of $3 million.
Balance Sheet & Cash Flow
As of Oct 31, 2023, PagerDuty had cash and cash equivalents and current investments of $575.3 million.
In the fiscal third quarter, PD successfully closed a $350 million convertible senior notes offering.
The operating cash flow amounted to $16.9 million, while the free cash flow was $15.2 million.
Guidance
For the fourth quarter of fiscal 2024, PagerDuty expects revenues between $109.5 million and $111.5 million, indicating growth in the 8% to 10% range.
Non-GAAP earnings for the fiscal fourth quarter are expected to be in the range of 14-15 cents per share.
For the fiscal 2024, the company expects revenues in the range of $429-$431 million, indicating 16% growth over fiscal 2023.
Non-GAAP earnings are expected in the range of 72-73 cents per share.
Zacks Rank & Key Picks
PagerDuty currently carries a Zacks Rank #3 (Hold).
ASANA ASAN, Science Applications International SAIC and Broadcam AVGO are some better-ranked stocks that investors can consider in the broader sector, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ASANA’s shares have gained 48.9% year to date. ASAN is set to report its third-quarter fiscal 2024 results on Dec 5.
Science Applications International’s shares have declined 5.8% year to date. SAIC is set to report third-quarter fiscal 2024 results on Dec 4.
Broadcam’s shares have returned 65.6% year to date. AVGO is set to report its fourth-quarter fiscal 2023 results on Dec 7.
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