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PagerDuty Announces Fourth Quarter and Full Year Fiscal 2023 Financial Results

Fourth quarter revenue increased 29% year-over-year to $101.0 million

Fourth quarter GAAP operating loss of $26.5 million, non-GAAP operating income of $6.1 million

PagerDuty, Inc. (NYSE: PD), a leader in digital operations management, today announced financial results for the fourth quarter and full year fiscal 2023, ended January 31, 2023.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230315005778/en/

PagerDuty Q4 and FY23 Infographic (Graphic: PagerDuty)

PagerDuty Q4 and FY23 Infographic (Graphic: PagerDuty)

“PagerDuty had another strong year where we grew revenue 32% year-over-year and achieved non-GAAP profitability a year ahead of plan,” said Jennifer Tejada, Chairperson and CEO at PagerDuty. “In Q4 PagerDuty achieved our first-ever $100 million quarter and surpassed $400 million in annual recurring revenue. We continue to combine durable growth with operating margin expansion and innovation.”

Fourth Quarter Fiscal 2023 Financial Highlights

  • Revenue was $101.0 million, an increase of 28.6% year over year.
  • GAAP operating loss was $26.5 million; GAAP operating margin of (26.2)%.
  • Non-GAAP operating income was $6.1 million; non-GAAP operating margin of 6.1%.
  • GAAP net loss per share attributable to PagerDuty, Inc. was $0.27; non-GAAP net income per diluted share attributable to PagerDuty, Inc. was $0.08.
  • Operating cash flow was $17.6 million, with free cash flow of $15.6 million.
  • Cash, cash equivalents and current investments were $477.0 million as of January 31, 2023.

Full Year Fiscal 2023 Financial Highlights

  • Revenue was $370.8 million, an increase of 31.8% year over year.
  • GAAP operating loss was $129.4 million; GAAP operating margin of (34.9)%.
  • Non-GAAP operating income was $3.5 million; non-GAAP operating margin of 0.9%.
  • GAAP net loss per share attributable to PagerDuty, Inc. was $1.45; non-GAAP net income per diluted share attributable to PagerDuty, Inc. was $0.07.
  • Operating cash flow was $17.0 million, with free cash flow of $8.5 million.

The section titled “Non-GAAP Financial Measures” below contains a description of the non-GAAP financial measures and reconciliations between historical GAAP and non-GAAP information.

Fourth Quarter and Recent Highlights

Financial Outlook

For the first quarter of fiscal 2024, PagerDuty currently expects:

  • Total revenue of $102.0 million - $104.0 million, representing a growth rate of 19% - 22% year over year
  • Non-GAAP net income per diluted share attributable to PagerDuty, Inc. of $0.09 - $0.10 assuming approximately 104 million shares

For the full fiscal year 2024, PagerDuty currently expects:

  • Total revenue of $446.0 million - $452.0 million, representing a growth rate of 20% - 22% year over year
  • Non-GAAP net income per diluted share attributable to PagerDuty, Inc. of $0.45 - $0.50 assuming approximately 105 million shares

These statements are forward-looking and actual results may differ materially. Please refer to the Forward-Looking Statements section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

PagerDuty has not reconciled its expectations as to non-GAAP net income (loss) per share attributable to PagerDuty, Inc. to GAAP net loss per share attributable to PagerDuty, Inc. because certain items are out of its control or cannot be reasonably predicted. Accordingly, a reconciliation for forward-looking non-GAAP net income (loss) per share is not available without unreasonable effort.

Conference Call Information:

PagerDuty will host a conference call and live webcast for analysts and investors at 2:00 p.m. Pacific Time on March 15, 2023. This news release with the financial results will be accessible from PagerDuty’s website at investor.pagerduty.com prior to the conference call. A live webcast of the conference call will be accessible from the PagerDuty investor relations website at investor.pagerduty.com.

Supplemental Financial and Other Information:

Supplemental financial and other information can be accessed through PagerDuty’s investor relations website at investor.pagerduty.com. PagerDuty uses the investor relations section on its website as the means of complying with its disclosure obligations under Regulation FD. Accordingly, we recommend that investors monitor PagerDuty’s investor relations website in addition to following PagerDuty’s press releases, SEC filings, social media, including PagerDuty’s LinkedIn account (https://www.linkedin.com/company/482819), Twitter account (twitter.com/pagerduty), the Twitter account @jenntejada and Facebook page (facebook.com/pagerduty), and public conference calls and webcasts.

Non-GAAP Financial Measures:

This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss) attributable to PagerDuty, Inc., non-GAAP net income (loss) per share attributable to PagerDuty, Inc., and free cash flow.

PagerDuty believes that non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past financial performance and can assist in comparisons with other companies, some of which use similar non-GAAP financial measures to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.

The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in PagerDuty’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by PagerDuty’s management about which expenses and income are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each historical non-GAAP financial measure to the most directly comparable financial measure presented in accordance with GAAP.

Specifically, PagerDuty excludes the following from its historical and prospective non-GAAP financial measures, as applicable:

Stock-based Compensation: PagerDuty utilizes stock-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of its stockholders and at long-term retention, rather than to address operational performance for any particular period. As a result, stock-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.

Employer Taxes Related to Employee Stock Transactions: PagerDuty views the amount of employer taxes related to its employee stock transactions as an expense that is dependent on its stock price, employee exercise and other award disposition activity, and other factors that are beyond PagerDuty’s control. As a result, employer taxes related to employee stock transactions vary for reasons that are generally unrelated to financial and operational performance in any particular period.

Amortization of Acquired Intangible Assets: PagerDuty views amortization of acquired intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of purchased intangibles is an expense that is not typically affected by operations during any particular period.

Acquisition-Related Expenses: PagerDuty views acquisition-related expenses, such as transaction costs, acquisition-related retention payments, and acquisition-related asset impairment, as events that are not necessarily reflective of operational performance during a period. In particular, PagerDuty believes the consideration of measures that exclude such expenses can assist in the comparison of operational performance in different periods which may or may not include such expenses.

Amortization of Debt Issuance Costs: The imputed interest rate of the Convertible Senior Notes (the "Notes") was approximately 1.93%. This is a result of the debt issuance costs, which reduce the carrying value of the convertible debt instruments. The debt issuance costs are amortized as interest expense. The expense for the amortization of the debt issuance costs is a non-cash item, and we believe the exclusion of this interest expense will provide for a more useful comparison of our operational performance in different periods.

Restructuring costs: PagerDuty views restructuring costs as events that are not necessarily reflective of operational performance during a period. In particular, PagerDuty believes the consideration of measures that exclude such expenses can assist in the comparison of operational performance in different periods which may or may not include such expenses.

Income Tax Effect of Non-GAAP Adjustments: PagerDuty excludes the related income tax effect of the non-GAAP adjustments described above and eliminates the impact of non-recurring and period-specific items, which can vary in size and frequency. In particular, PagerDuty believes the consideration of measures that exclude such impacts can assist in the comparison of operational performance in different periods which may or may not include items such as acquisition-related income tax benefits.

PagerDuty defines non-GAAP gross profit as gross profit adjusted for stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, and restructuring costs. PagerDuty defines non-GAAP gross margin as non-GAAP gross profit as a percentage of revenue.

PagerDuty defines non-GAAP operating income (loss) as GAAP loss from operations excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, acquisition-related expenses, and restructuring costs. PagerDuty defines non-GAAP net income (loss) attributable to PagerDuty, Inc. (which is used in calculating non-GAAP net income (loss) per share attributable to PagerDuty, Inc.) as GAAP net loss attributable to PagerDuty, Inc. excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of debt issuance costs, amortization of acquired intangible assets, acquisition-related expenses, which include transaction costs and acquisition-related retention payments, which are not necessarily reflective of operational performance during a given period, restructuring costs, and the associated tax impact of these items, where applicable. There are a number of limitations related to the use of these non-GAAP measures as compared to GAAP operating loss and net loss, including that the non-GAAP measures exclude stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in PagerDuty’s business and an important part of its compensation strategy.

PagerDuty defines free cash flow as net cash provided by (used in) operating activities, less cash used for purchases of property and equipment and capitalized internal-use software costs. In addition to the reasons stated above, PagerDuty believes that free cash flow is useful to investors as a liquidity measure because it measures PagerDuty’s ability to generate or use cash in excess of its capital investments in property and equipment to strengthen its balance sheet and further invest in its business and potential strategic initiatives. PagerDuty uses free cash flow in conjunction with traditional GAAP measures as part of its overall assessment of its liquidity, including the preparation of PagerDuty’s annual operating budget and quarterly forecasts, to evaluate the effectiveness of its business strategies, and to assess its liquidity.

There are a number of limitations related to the use of free cash flow as compared to net cash provided by (used in) operating activities, including that free cash flow includes capital expenditures, the benefits of which are realized in periods subsequent to those when expenditures are made.

PagerDuty encourages investors to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate PagerDuty’s business.

Please see the reconciliation tables at the end of this release for the reconciliation of GAAP and non-GAAP results.

Forward-Looking Statements:

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our future financial performance and outlook and market positioning. Words such as “expect,” “extend,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “accelerate,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks and other factors detailed in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 17, 2022 and our Quarterly Reports on Form 10-Qs filed with the SEC on June 3, 2022, September 2, 2022, and December 2, 2022. Additional information will be made available in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023 and other filings and reports that we may file from time to time with the SEC. In particular, the following risks and uncertainties, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: the effect of uncertainties related to the COVID-19 pandemic on U.S. and global markets, our business, operations, revenue results, cash flow, operating expenses, demand for our solutions, sales cycles, customer retention and our customers’ businesses; our ability to achieve and maintain future profitability; our ability to attract new customers and retain and sell additional functionality and services to our existing customers; our ability to sustain and manage our growth; our dependence on revenue from a single product; our ability to compete effectively in an increasingly competitive market; and general global market, political, economic, and business conditions.

Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

About PagerDuty

PagerDuty, Inc. (NYSE:PD) is a leader in digital operations management. In an always-on world, organizations of all sizes trust PagerDuty to help them deliver a better digital experience to their customers, every time. Teams use PagerDuty to identify issues and opportunities in real time and bring together the right people to fix problems faster and prevent them in the future. Notable customers include Cisco, Genentech, Electronic Arts, Cox Automotive, Shopify, Zoom, DoorDash, and more. To learn more and try PagerDuty for free, visit www.pagerduty.com. Follow our blog and connect with us on Twitter, LinkedIn, YouTube and Facebook. We’re also hiring, visit https://www.pagerduty.com/careers/ to learn more.

PagerDuty, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

 

Three Months Ended January 31,

 

Year Ended January 31,

 

2023

 

2022

 

2023

 

2022

Revenue

$

100,966

 

 

$

78,509

 

 

$

370,793

 

 

$

281,396

 

Cost of revenue(1)

 

18,344

 

 

 

13,928

 

 

 

70,434

 

 

 

48,361

 

Gross profit

 

82,622

 

 

 

64,581

 

 

 

300,359

 

 

 

233,035

 

Operating expenses:

 

 

 

 

 

 

 

Research and development(1)

 

34,569

 

 

 

27,628

 

 

 

134,876

 

 

 

95,690

 

Sales and marketing(1)

 

52,621

 

 

 

43,400

 

 

 

195,622

 

 

 

161,624

 

General and administrative(1)

 

21,922

 

 

 

20,752

 

 

 

99,238

 

 

 

77,432

 

Total operating expenses

 

109,112

 

 

 

91,780

 

 

 

429,736

 

 

 

334,746

 

Loss from operations

 

(26,490

)

 

 

(27,199

)

 

 

(129,377

)

 

 

(101,711

)

Interest income

 

2,005

 

 

 

640

 

 

 

4,765

 

 

 

2,946

 

Interest expense

 

(1,361

)

 

 

(1,353

)

 

 

(5,433

)

 

 

(5,398

)

Other income (expense), net

 

1,307

 

 

 

(826

)

 

 

(19

)

 

 

(2,757

)

Loss before (provision for) benefit from income taxes

 

(24,539

)

 

 

(28,738

)

 

 

(130,064

)

 

 

(106,920

)

(Provision for) benefit from income taxes

 

(463

)

 

 

(157

)

 

 

839

 

 

 

(535

)

Net loss

$

(25,002

)

 

$

(28,895

)

 

$

(129,225

)

 

$

(107,455

)

Net loss attributable to redeemable non-controlling interest

 

(440

)

 

 

 

 

 

(802

)

 

 

 

Net loss attributable to PagerDuty, Inc.

 

(24,562

)

 

 

(28,895

)

 

 

(128,423

)

 

 

(107,455

)

Net loss per share, basic and diluted, attributable to PagerDuty, Inc.

$

(0.27

)

 

$

(0.34

)

 

$

(1.45

)

 

$

(1.27

)

Weighted-average shares used in calculating net loss per share, basic and diluted

 

90,269

 

 

 

86,101

 

 

 

88,721

 

 

 

84,514

 

(1) Includes stock-based compensation expense as follows:

 

 

Three Months Ended January 31,

 

Year Ended January 31,

 

2023

 

2022

 

2023

 

2022

Cost of revenue

$

1,879

 

$

1,191

 

$

6,827

 

$

3,751

Research and development

 

8,946

 

 

7,534

 

 

39,012

 

 

23,764

Sales and marketing

 

7,271

 

 

6,051

 

 

29,804

 

 

19,012

General and administrative

 

5,333

 

 

7,391

 

 

34,264

 

 

23,506

Total

$

23,429

 

$

22,167

 

$

109,907

 

$

70,033

PagerDuty, Inc.

Consolidated Balance Sheets

(in thousands)

 

 

As of January 31,

 

2023

 

2022

 

(unaudited)

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

274,019

 

 

$

349,785

 

Investments

 

202,948

 

 

 

193,571

 

Accounts receivable, net of allowance for credit losses of $2,014 and $1,809 as of January 31, 2023 and January 31, 2022, respectively

 

91,345

 

 

 

75,279

 

Deferred contract costs, current

 

18,674

 

 

 

16,672

 

Prepaid expenses and other current assets

 

13,350

 

 

 

9,777

 

Total current assets

 

600,336

 

 

 

645,084

 

Property and equipment, net

 

18,390

 

 

 

18,229

 

Deferred contract costs, non-current

 

27,715

 

 

 

26,159

 

Lease right-of-use assets

 

13,982

 

 

 

20,227

 

Goodwill

 

118,862

 

 

 

72,126

 

Intangible assets, net

 

37,224

 

 

 

23,133

 

Other assets

 

1,364

 

 

 

1,490

 

Total assets

$

817,873

 

 

$

806,448

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

7,398

 

 

$

9,505

 

Accrued expenses and other current liabilities

 

11,804

 

 

 

13,640

 

Accrued compensation

 

41,834

 

 

 

35,327

 

Deferred revenue, current

 

204,137

 

 

 

162,881

 

Lease liabilities, current

 

5,904

 

 

 

5,637

 

Total current liabilities

 

271,077

 

 

 

226,990

 

Convertible senior notes, net

 

282,908

 

 

 

281,069

 

Deferred revenue, non-current

 

4,914

 

 

 

7,343

 

Lease liabilities, non-current

 

12,704

 

 

 

20,912

 

Other liabilities

 

4,184

 

 

 

3,159

 

Total liabilities

 

575,787

 

 

 

539,473

 

Redeemable non-controlling interest

 

1,108

 

 

 

 

Stockholders’ equity:

 

 

 

Common stock

 

 

 

 

 

Additional paid-in-capital

 

719,816

 

 

 

616,467

 

Accumulated other comprehensive loss

 

(1,592

)

 

 

(669

)

Accumulated deficit

 

(477,246

)

 

 

(348,823

)

Total stockholders’ equity

 

240,978

 

 

 

266,975

 

Total liabilities, redeemable non-controlling interest, and stockholders’ equity

$

817,873

 

 

$

806,448

 

PagerDuty, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Three Months Ended January 31,

 

Year Ended January 31,

 

2023

 

2022

 

2023

 

2022

Cash flows from operating activities

 

 

 

 

 

 

 

Net loss attributable to PagerDuty, Inc.

 

(24,562

)

 

 

(28,895

)

 

 

(128,423

)

 

 

(107,455

)

Net loss attributable to redeemable non-controlling interest

 

(440

)

 

 

 

 

 

(802

)

 

 

 

Net loss

$

(25,002

)

 

$

(28,895

)

 

$

(129,225

)

 

$

(107,455

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

4,651

 

 

 

2,196

 

 

 

17,429

 

 

 

8,356

 

Amortization of deferred contract costs

 

5,069

 

 

 

4,272

 

 

 

19,247

 

 

 

14,923

 

Amortization of debt issuance costs

 

463

 

 

 

455

 

 

 

1,839

 

 

 

1,805

 

Stock-based compensation

 

23,429

 

 

 

22,167

 

 

 

109,907

 

 

 

70,033

 

Non-cash lease expense

 

1,160

 

 

 

1,133

 

 

 

4,073

 

 

 

4,464

 

Tax benefit related to release of valuation allowance

 

 

 

 

 

 

 

(1,330

)

 

 

 

Other

 

155

 

 

 

1,178

 

 

 

1,841

 

 

 

3,770

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

(19,634

)

 

 

(21,954

)

 

 

(16,586

)

 

 

(21,594

)

Deferred contract costs

 

(6,482

)

 

 

(9,325

)

 

 

(22,805

)

 

 

(26,167

)

Prepaid expenses and other assets

 

91

 

 

 

2,136

 

 

 

(2,843

)

 

 

1,279

 

Accounts payable

 

(356

)

 

 

(935

)

 

 

(1,473

)

 

 

2,901

 

Accrued expenses and other liabilities

 

(94

)

 

 

(20

)

 

 

(1,444

)

 

 

(99

)

Accrued compensation

 

6,771

 

 

 

3,006

 

 

 

6,147

 

 

 

6,766

 

Deferred revenue

 

29,336

 

 

 

27,374

 

 

 

37,971

 

 

 

40,252

 

Lease liabilities

 

(1,985

)

 

 

(1,443

)

 

 

(5,768

)

 

 

(5,255

)

Net cash provided by (used in) operating activities

 

17,572

 

 

 

1,345

 

 

 

16,980

 

 

 

(6,021

)

Cash flows from investing activities

 

 

 

 

 

 

 

Purchases of property and equipment

 

(882

)

 

 

(2,081

)

 

 

(4,637

)

 

 

(3,457

)

Capitalization of internal-use software costs

 

(1,111

)

 

 

(652

)

 

 

(3,836

)

 

 

(3,353

)

Business acquisitions, net of cash acquired

 

 

 

 

 

 

 

(66,262

)

 

 

(160

)

Asset acquisition

 

 

 

 

 

 

 

(1,845

)

 

 

 

Purchases of available-for-sale investments

 

(56,900

)

 

 

(46,485

)

 

 

(212,210

)

 

 

(197,093

)

Proceeds from maturities of available-for-sale investments

 

53,000

 

 

 

37,443

 

 

 

202,625

 

 

 

194,059

 

Proceeds from sales of available-for-sale investments

 

 

 

 

 

 

 

 

 

 

27,380

 

Net cash (used in) provided by investing activities

 

(5,893

)

 

 

(11,775

)

 

 

(86,165

)

 

 

17,376

 

Cash flows from financing activities

 

 

 

 

 

 

 

Investment from redeemable non-controlling interest holder

 

 

 

 

 

 

 

1,908

 

 

 

 

Proceeds from employee stock purchase plan

 

4,139

 

 

 

2,853

 

 

 

9,875

 

 

 

7,742

 

Proceeds from issuance of common stock upon exercise of stock options

 

2,022

 

 

 

2,591

 

 

 

10,481

 

 

 

15,108

 

Employee payroll taxes paid related to net share settlement of restricted stock units

 

(6,490

)

 

 

(4,967

)

 

 

(28,677

)

 

 

(23,586

)

Net cash (used in) provided by financing activities

 

(329

)

 

 

477

 

 

 

(6,413

)

 

 

(736

)

Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash

 

336

 

 

 

 

 

 

(168

)

 

 

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

11,686

 

 

 

(9,953

)

 

 

(75,766

)

 

 

10,619

 

Cash, cash equivalents, and restricted cash at beginning of period

 

262,333

 

 

 

359,738

 

 

 

349,785

 

 

 

339,166

 

Cash, cash equivalents, and restricted cash at end of period

$

274,019

 

 

$

349,785

 

 

$

274,019

 

 

$

349,785

 

PagerDuty, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except percentages)

(unaudited)

 

 

Three Months Ended January 31,

 

Year Ended January 31,

 

2023

 

2022

 

2023

 

2022

Reconciliation of gross profit and gross margin

 

 

 

 

 

 

 

GAAP gross profit

$

82,622

 

 

$

64,581

 

 

$

300,359

 

 

$

233,035

 

Plus: Stock-based compensation

 

1,879

 

 

 

1,191

 

 

$

6,827

 

 

$

3,751

 

Plus: Employer taxes related to employee stock transactions

 

84

 

 

 

53

 

 

 

163

 

 

 

131

 

Plus: Amortization of acquired intangible assets

 

2,087

 

 

 

280

 

 

 

7,401

 

 

 

1,120

 

Plus: Restructuring costs

 

357

 

 

 

 

 

 

357

 

 

 

 

Non-GAAP gross profit

$

87,029

 

 

$

66,105

 

 

$

315,107

 

 

$

238,037

 

GAAP gross margin

 

81.8

%

 

 

82.3

%

 

 

81.0

%

 

 

82.8

%

Non-GAAP adjustments

 

4.4

%

 

 

1.9

%

 

 

4.0

%

 

 

1.8

%

Non-GAAP gross margin

 

86.2

%

 

 

84.2

%

 

 

85.0

%

 

 

84.6

%

 

 

 

 

 

 

 

 

Reconciliation of operating expenses

 

 

 

 

 

 

 

GAAP research and development

$

34,569

 

 

$

27,628

 

 

$

134,876

 

 

$

95,690

 

Less: Stock-based compensation

 

(8,946

)

 

 

(7,534

)

 

$

(39,012

)

 

$

(23,764

)

Less: Employer taxes related to employee stock transactions

 

(383

)

 

 

(311

)

 

 

(942

)

 

 

(929

)

Less: Acquisition-related expenses

 

(5

)

 

 

(441

)

 

 

(3,105

)

 

 

(1,789

)

Less: Amortization of acquired intangible assets

 

(87

)

 

 

 

 

 

(232

)

 

 

 

Less: Restructuring costs

 

(2,004

)

 

 

 

 

 

(2,004

)

 

 

 

Non-GAAP research and development

$

23,144

 

 

$

19,342

 

 

$

89,581

 

 

$

69,208

 

 

 

 

 

 

 

 

 

GAAP sales and marketing

$

52,621

 

 

$

43,400

 

 

$

195,622

 

 

$

161,624

 

Less: Stock-based compensation

 

(7,271

)

 

 

(6,051

)

 

 

(29,804

)

 

 

(19,012

)

Less: Employer taxes related to employee stock transactions

 

(424

)

 

 

(232

)

 

 

(892

)

 

 

(765

)

Less: Amortization of acquired intangible assets

 

(610

)

 

 

(595

)

 

 

(2,546

)

 

 

(2,380

)

Less: Restructuring costs

 

(2,200

)

 

 

 

 

 

(2,200

)

 

 

 

Non-GAAP sales and marketing

$

42,116

 

 

$

36,522

 

 

$

160,180

 

 

$

139,467

 

 

 

 

 

 

 

 

 

GAAP general and administrative

$

21,922

 

 

$

20,752

 

 

$

99,238

 

 

$

77,432

 

Less: Stock-based compensation

 

(5,333

)

 

 

(7,391

)

 

 

(34,264

)

 

 

(23,506

)

Less: Employer taxes related to employee stock transactions

 

(449

)

 

 

(335

)

 

 

(1,099

)

 

 

(1,192

)

Less: Acquisition-related expenses

 

 

 

 

(311

)

 

 

(1,454

)

 

 

(319

)

Less: Amortization of acquired intangible assets

 

(22

)

 

 

 

 

 

(58

)

 

 

 

Less: Restructuring costs

 

(474

)

 

 

 

 

 

(474

)

 

 

 

Non-GAAP general and administrative

$

15,644

 

 

$

12,715

 

 

$

61,889

 

 

$

52,415

 

PagerDuty, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except percentages and per share data)

(unaudited)

 

 

Three Months Ended January 31,

 

Year Ended January 31,

 

2023

 

2022

 

2023

 

2022

Reconciliation of operating income (loss) and operating margin

 

 

 

 

 

 

 

GAAP operating loss

$

(26,490

)

 

$

(27,199

)

 

$

(129,377

)

 

$

(101,711

)

Plus: Stock-based compensation

 

23,429

 

 

 

22,167

 

 

 

109,907

 

 

 

70,033

 

Plus: Employer taxes related to employee stock transactions

 

1,340

 

 

 

931

 

 

 

3,096

 

 

 

3,017

 

Plus: Amortization of acquired intangible assets

 

2,806

 

 

 

875

 

 

 

10,237

 

 

 

3,500

 

Plus: Acquisition-related expenses

 

5

 

 

 

752

 

 

 

4,559

 

 

 

2,108

 

Plus: Restructuring costs

 

5,035

 

 

 

 

 

 

5,035

 

 

 

 

Non-GAAP operating income (loss)

$

6,125

 

 

$

(2,474

)

 

$

3,457

 

 

$

(23,053

)

GAAP operating margin

 

(26.2

) %

 

 

(34.6

) %

 

 

(34.9

) %

 

 

(36.1

) %

Non-GAAP adjustments

 

32.3

%

 

 

31.4

%

 

 

35.8

%

 

 

27.9

%

Non-GAAP operating margin

 

6.1

%

 

 

(3.2

) %

 

 

0.9

%

 

 

(8.2

) %

 

 

 

 

 

 

 

 

Reconciliation of net income (loss)

 

 

 

 

 

 

 

GAAP net loss attributable to PagerDuty, Inc.

$

(24,562

)

 

$

(28,895

)

 

$

(128,423

)

 

$

(107,455

)

Plus: Stock-based compensation

 

23,429

 

 

 

22,167

 

 

 

109,907

 

 

 

70,033

 

Plus: Employer taxes related to employee stock transactions

 

1,340

 

 

 

931

 

 

 

3,096

 

 

 

3,017

 

Plus: Amortization of debt issuance costs

 

463

 

 

 

455

 

 

 

1,839

 

 

 

1,805

 

Plus: Amortization of acquired intangible assets

 

2,806

 

 

 

875

 

 

 

10,237

 

 

 

3,500

 

Plus: Acquisition-related expenses

 

5

 

 

 

752

 

 

 

4,559

 

 

 

2,108

 

Plus: Restructuring costs

 

5,035

 

 

 

 

 

 

5,035

 

 

 

 

Plus: Income tax effect of non-GAAP adjustments

 

(1,226

)

 

 

 

 

 

(2,556

)

 

 

 

Non-GAAP net income (loss) attributable to PagerDuty, Inc.

$

7,290

 

 

$

(3,715

)

 

$

3,694

 

 

$

(26,992

)

 

 

 

 

 

 

 

 

Reconciliation of net income (loss) per share, basic

 

 

 

 

 

 

 

GAAP net loss per share, basic, attributable to PagerDuty, Inc.

$

(0.27

)

 

$

(0.34

)

 

$

(1.45

)

 

$

(1.27

)

Non-GAAP adjustments to net loss attributable to PagerDuty, Inc.

 

0.35

 

 

 

0.30

 

 

 

1.49

 

 

 

0.95

 

Non-GAAP net income (loss) per share, basic, attributable to PagerDuty, Inc.

$

0.08

 

 

$

(0.04

)

 

$

0.04

 

 

$

(0.32

)

 

 

 

 

 

 

 

 

Reconciliation of net income (loss) per share, diluted(1)

 

 

 

 

 

 

 

GAAP net loss per share, diluted, attributable to PagerDuty, Inc.

$

(0.27

)

 

$

(0.34

)

 

$

(1.45

)

 

$

(1.27

)

Non-GAAP adjustments to net loss attributable to PagerDuty, Inc.

 

0.35

 

 

 

0.30

 

 

 

1.52

 

 

 

0.95

 

Non-GAAP net income (loss) per share, diluted, attributable to PagerDuty, Inc.

$

0.08

 

 

$

(0.04

)

 

$

0.07

 

 

$

(0.32

)

 

 

 

 

 

 

 

 

Weighted-average shares used in calculating GAAP net loss per share, basic and diluted

 

90,269

 

 

 

86,101

 

 

 

88,721

 

 

 

84,514

 

 

 

 

 

 

 

 

 

Weighted-average shares used in calculating non-GAAP net income (loss) per share

 

 

 

 

 

 

 

Basic

 

90,269

 

 

 

86,101

 

 

 

88,721

 

 

 

84,514

 

Diluted

 

101,747

 

 

 

86,101

 

 

 

100,862

 

 

 

84,514

 

Note: Certain figures may not sum due to rounding.

(1) The company uses the if-converted method to calculate the non-GAAP net income per diluted share attributable to PagerDuty, Inc. related to the convertible notes. Approximately 7.2 million shares related to the convertible notes were therefore included in the non-GAAP diluted share number, while the numerator used to compute this measure was increased by $0.9 million and $3.6 million for after-tax interest expense savings related to our convertible notes for the three and twelve months ended January 31, 2023.

PagerDuty, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except percentages and per share data)

(unaudited)

Free Cash Flow

 

 

Three Months Ended January 31,

 

Year Ended January 31,

 

2023

 

2022

 

2023

 

2022

Net cash provided by (used in) operating activities

$

17,572

 

 

$

1,345

 

 

$

16,980

 

 

$

(6,021

)

Less:

 

 

 

 

 

 

 

Purchases of property and equipment

 

(882

)

 

 

(2,081

)

 

 

(4,637

)

 

 

(3,457

)

Capitalization of internal-use software costs

 

(1,111

)

 

 

(652

)

 

 

(3,836

)

 

 

(3,353

)

Free cash flow

$

15,579

 

 

$

(1,388

)

 

$

8,507

 

 

$

(12,831

)

Net cash (used in) provided by investing activities

$

(5,893

)

 

$

(11,775

)

 

$

(86,165

)

 

$

17,376

 

Net cash (used in) provided by financing activities

$

(329

)

 

$

477

 

 

$

(6,413

)

 

$

(736

)

Free cash flow margin

 

15.4

%

 

 

(1.8

) %

 

 

2.3

%

 

 

(4.6

) %

 

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