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Pager-Duty stocks take a severe blow due to deteriorating outlook in the midst of larger economic challenges.


Jun 2, 2023

PagerDuty Inc. announced disappointing results for their application observability platform in late trading, which led to a plunge in their stock price. The company reported a first-quarter profit of 20 cents per share, up from a loss of 4 cents per share in the same period of the previous year, with sales increasing by 21% to $103.2 million. However, they lowered their outlook due to broader macroeconomic issues in the economy. Analysts were expecting earnings of 3 cents per share and revenue of $103.22 million for the quarter.

At the end of April, PagerDuty had $495.1 million in cash, cash equivalents, and current investments, compared to $467.5 million in the same period last year. The company’s paying customers increased from 13,918 to 15,040, and their annual recurring revenue over $100,000 increased from 458 to 655.

PagerDuty CEO Jennifer Tejada stated in a corporate financial results announcement that they achieved balanced growth in the first quarter, with strong revenue growth of 21% and a record 16% non-GAAP operating margin. The company’s highlights for the quarter included making their AIOps solution generally available, which reduces noise and labor to provide DevOps and IT teams with superior incident automation capabilities.

PagerDuty’s AIOps solution includes tools that provide event correlation, noise reduction, and contextual triage to make it easy to analyze data during an incident. The company also launched three AI-supported production capabilities for their PagerDuty Operations Cloud called “GenAI,” which brings consumer-style simplicity to enterprise-level automation.

For the second quarter of fiscal 2024, PagerDuty expects adjusted earnings of 10 to 11 cents on sales of $103.5 million to $105.5 million. Analysts expected 9 cents and $8.6 million, so the results were mixed. For the full year, the company forecasts earnings of 60 cents to 65 cents a share and revenues of $425 million to $430 million. Analysts expected 44 cents or $448.3 million. The weaker-than-expected earnings outlook was attributed to the uncertainty of the economy.

PagerDuty CFO Howard Wilson stated in an interview with MarketWatch that while the economic environment is uncertain, their business is strong and believes the economic environment will improve. However, PagerDuty’s stock fell more than 17% in late trading.

By Editor

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