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PagerDuty (PD) to Report Q2 Earnings: What's in the Offing?

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Zacks Equity Research
·3 min read
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PagerDuty PD is set to release second-quarter fiscal 2021 results on Sep 2.

For the quarter, the company expects total revenues between $50 million and $51 million. On a non-GAAP basis, loss is expected between 6 cents and 7 cents per share.

The Zacks Consensus Estimate for revenues is pegged at $50.7 million, suggesting growth of 25.6% from the figure reported in the year-ago quarter.

The consensus mark for loss stayed at 6 cents per share over the past 30 days. PagerDuty had reported a loss of 7 cents in the year-ago quarter.

PagerDuty Inc. Price and EPS Surprise


PagerDuty Inc. Price and EPS Surprise
PagerDuty Inc. Price and EPS Surprise

PagerDuty Inc. price-eps-surprise | PagerDuty Inc. Quote

Notably, the company beat the Zacks Consensus Estimate in the past four quarters, delivering an earnings surprise of 31.1%, on average.

Let’s see how things have shaped up for this announcement.

Factors to Watch

PagerDuty is expected to have benefited from the ongoing digital transformation accelerated by the coronavirus pandemic. The company’s clientele expanded to 13,060 at the end of the fiscal first quarter, up 12% year over year. The momentum is likely to have continued in the to-be-reported quarter.

PagerDuty’s ability to resolve outages and incidents within a short span of time has been a major catalyst. Its services have been selected by the likes of Zoom Video ZM and Discovery DISCA in recent times. The company is also gaining traction from expanding digital-use cases including cloud adoption, DevOps, security, distributed architecture and remote working.

Moreover, enhanced automation and intelligence capabilities of Dynamic Service Directory, Business Response and Intelligent Triage solutions are expected to increase demand for PagerDuty’s solutions.

Further, integration with Microsoft Teams has allowed users to not only view critical-incident details from within the Microsoft Teams interface, but also performs key incident actions. It also promotes work from anywhere and eliminates the need for responders to switch to another platform inorder to communicate with their team while resolving an incident.

Additionally, this Zacks Rank #3 (Hold) company earns majority of its revenues from subscriptions, much similar to its Zacks Internet Software peers like Zuora ZUO, Anaplan, Model N and HubSpot. Notably, subscription-based businesses have proven resilient to the disruption caused by the pandemic. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zuora expects subscription revenues in the range of $58-$59 million. At mid-point, this indicates 15.6% year-over-year growth. Markedly, Anaplan, Model N and HubSpot reported subscription-revenue growth of 32%, 10% and 26%, respectively, in their recently concluded quarterly results.

Nevertheless, delay in enterprise-expansion projects and increased churn among small and medium businesses due to the coronavirus-led economic uncertainty is expected to have hurt PagerDuty’s top-line growth in the to-be-reported quarter.

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