Why PagerDuty Shares Are Diving Today

PagerDuty Inc PD shares are trading lower by over 10%, reflecting its soft outlook.

The company reported Q2 FY24 revenue growth of 19% Y/Y to $107.62 million, beating the consensus of $104.18 million.

Annual recurring revenue rose 17% Y/Y to $431.0 million.

As of July 31, 2023, customers with annual recurring revenue of more than $100,000 rose 12% Y/Y to 773, and the dollar-based net retention rate stood at 114%.

Total paid customers stood at 15,146 as of July 31, 2023, vs. 15,174 a year ago.

Adjusted operating income came in at $14.3 million, with an operating margin of 13.3% in the quarter.

Adjusted EPS of $0.19 exceeded the consensus of $0.10. 

Operating cash flow stood at $10.8 million, with free cash flow of $8.7 million.

As of July 31, 2023, cash, cash equivalents, and current investments stood at $504.5 million.

"We accelerated momentum with our new products in our enterprise customer segment, which remains both resilient and engaged. PagerDuty advanced our generative AI offerings in the quarter to include AI-generated runbooks, expanding the Operations Cloud to address our customers' top priorities – to protect and grow revenue, reduce operating costs and mitigate risk," said Jennifer Tejada, Chairperson and CEO.

Outlook: PD expects Q3 adjusted EPS of $0.13-$0.14 vs. consensus of $0.15 and revenue of $106.5 million-$108.5 million vs. street view of $106.91 million.

For FY24, the company revised the outlook for revenue to $426 million-$430 million from $425 million - $430 million vs. the consensus of $427.73 million.

PD reaffirmed the adjusted EPS outlook at $0.60-$0.65 vs. the street view of $0.62.

Also Read: Cathie Wood Trimmed This Big Tech Stock Holding But Bulked Up On SaaS Provider PagerDuty And Ginkgo Bioworks

Price Action: PD shares are trading lower by 10.13% at $23.15 premarket on the last check Friday.