PD - Earnings call transcript Q2 2020

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Operator

Good afternoon. My name is Camille, and I'll be your conference operator today. At this time, I would like to welcome everyone to the PagerDuty Second Quarter 2020 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. you. Thank Instructions] [Operator

turn over now Please Stacey go ahead. the will to conference Finerman. I

Stacey Finerman

thank joining the results. you conference and Officer; Tejada, afternoon, Good for Chief and Financial discuss today's are Executive second Officer. PagerDuty's on Chairperson call Howard us PagerDuty's quarter Chief me financial Wilson, With and call Jennifer company's to today's on

statements. Statements made on this call include forward-looking

those actual be unknown Forward-looking and uncertainties from our known materially cause to achievements and risks or the results, involve by or statements may performance implied forward-looking expressed different that statements.

the and these Forward-looking we are such our undertake management's statements and statements. forward-looking represent assumptions beliefs only made, update as of date no to obligation statements

to to with GAAP. discuss performance financial financial we limitations measures versus In addition, accordance non-GAAP call, measures prepared during closest the substitute in equivalents. a are non-GAAP measures. non-GAAP related today's of for or not to of and use a GAAP in financial superior financial of number will addition There These measures their are these

other for GAAP example, measures earnings our use financial performance, available measures their evaluate could calculate companies reconciliation A as of release. non-GAAP financial may which to measures measures tools financial the all usefulness other non-GAAP reduce and differently of our non-GAAP comparison. between or may is For in

time, previously filings to these quarterly Form make time with recent factors information the company's and filed and the that in Commission the other with SEC. are Risk and Factors from included we most Further financial the on could section XX-Q affect results company's the Exchange titled Securities including

CEO, turn to to over like our I'd Jennifer Tejada. Now call Jennifer? the

Jennifer Tejada

team. Stacey us to to thank for have here, you, afternoon earnings second our the Investor VP Stacey. you Thank you, of welcome new call. PagerDuty our to this Relations, I'm and for Great quarter everyone, joining pleased Finerman, Stacey,

driven by $XX leadership another international quarter new our expansion. we new customers, and management. operations for growth: rapidly our in was first demonstrating growing was engines a million QX new It category quarter, our users, strong adoption revenue digital pioneered: product multiple

year-over-year geographies. We closed customers. broad net XX% across adding grew XX,XXX industries, XXX with demand new Revenue continued the with customers, total quarter verticals and

QX XX, is year-over-year, represents This our $XXX,XXX, XXX. increase of for over customers enterprise expansion of segments. quarter spending further by totaling also and increasing a validating in an in market success record XX%

grew efficiently, margins XX%. We best-in-class non-GAAP sustaining of gross

trust in team tied directly our is success the we users of and our customers, Our the and success PagerDuty. they in and to appreciate and our place respect

well strong During of new three saw Demand will as the quarter, we for of number our Incident focus on Visibility I Response, which adoption products, by Event of robust Intelligence, is trends, platform as Modern macro Analytics. our demand a driven today. and

time shrinking than of is seconds. consumer less the brand amount the perfect to will when First, a experience is not wait X

of the to digital customers' and Second, architectures creates technology, in distributed need proliferation managed computing, on stemming that apps hugely comes with IT expectations. This technology transformation ecosystems and cloud complex deliver signals challenges to be from modernization.

employees' support requires modern scalably and environment. And dynamic intuitive third, together apps work and in needs developer-influenced seamlessly, workforce that securely today's the real-time

agile that sequential of don't heavy a in require to manual command-and-control incident today's workloads. challenges cloud often to address environment. integration, solutions management work and come prior computing trends. deploy Traditional designed these were time support can't the They Many with investments

PagerDuty different. is

was and well work real-time, as Our platform architected enterprises. cross-functional delivers world's scale. is designed as for It proven resiliency at for the largest additional disruptors

cloud and XX created methodology would made years a become a teams. mainstream solution that we bet for DevOps Management On-Call big native DevOps ago,

solutions. platform, entry which separating intelligence on-call learning voted from enhanced point solution it and our Our is substantially bet credit paid cards. engineers for machine with our off as their now other with is the automation, software Today,

gain they enhanced management. shifting value on-call operations incident add customers real-time by platform, rotation and to significant the PagerDuty orchestration, and from top management proactive When products automated coordination on of basic of

area in of of engineering A payments platform key products. uses a a across is our public businesses Automation new its point-of-sale focus PagerDuty teams. used solutions all mobile company by millions with

the and Event added Intelligence, This them which and company teams. cohorts intelligently learning human quarter, to machine data automatically response machine combines route the right to group using

As unplanned reducing and a hours customer result, by XX%, of improving protecting the customer has costs. revenue saving reduced incidents operation work, experience,

by Group, XX% number leader over $XXX,XXX. the We also their adapted estimate reducing this the their reducing Event in fintech derivative, global of and services annual to IG a employed. Intelligence quarter, be thereby projected savings work

which customers themselves work a each our and or multiple about as recently executives tweet in complain work stressful they incident. employees We study, scramble address causes real-time bad hours find teams commissioned This of silos out experience. when revealed of XX% that unplanned from to first incidents about

Our cross-functional Modern orchestrating response, ensure intelligently Incident these by detecting problems team Response a experience. teams solution automatically and issues better customer addresses helping to

three global across principally industries: and company insight resources, data, public, services information transportation. Markit and IHS billion natural a providing is major and financial energy $XX software

platform. Response with Markit X,XXX deploying quarter, replaced scale users. The across did solution that nearly IHS This our and a platform is PagerDuty company not point effectively Modern Incident

to risk. competitiveness our important time incidents which, also unplanned work and Team burnout, determine survey, increasing, and creates XX% this the results the business work can and that lost that impact unplanned time and customer-impacting on impact brand less states their companies less line. innovate. According is productivity cost in in turn, bottom It's of states to of development

incidents. cannot understand of real-time impact companies Other business the

view people, the in Visibility of market real-time outages like No services Our and technology, moments impact outcomes. translates into holistic in disruptions a correlates the incidents and impact immediate product operation business that matter. business product and of the consolidates other

and proactive issues. have dashboards operational approach companies apply to based digital major so on scorecards a PagerDuty managing operations analytics historically customizable can provides to teams responded how

detect is PagerDuty. and people provide significant of health, scorecards business cost industry-first and curated to response cost differentiator health team team. business approach The like for metrics a response This total of service improve the a outcomes and technology to the incidents, to predictive an

by platform. excited of visibility PagerDuty's the are broad We

This quarter, number our where a use have we cases platform. applied our of new discovered customers

of for worldwide they across Having payment expanded security that millions legal, A and of digital operations late-stage, then developers, PagerDuty hydro to teams. businesses fintech with teams. their its started users company payments uses facilitates many

The The on enforcement, payment to real law global banking ensuring partners ensure successful response PagerDuty with teams SecOps coordinate to use security and risk monitor to transaction. in team operations compliance. requests PagerDuty teams issues. security time-sensitive time, real-time for on manage physical are are PagerDuty security from legal and teams Physical

use its recognized life where a global leader to matter. A company monitor in emergency navigation and complete previously death used scale devices PagerDuty to PagerDuty and The wireless digital is After and monitoring devices switched PagerDuty a recognizing company now reliability due provides, basic service concerns. initiatives. transformation to communication expanded its PagerDuty uses its improved has or value GPS to reliability of reliability, the

application digitized new food for over all our improves stamps. minutes and for commonly SNAP, GetCalFresh applying Program, was stamps. to currently for reducing time from million Assistance helped on X the known Californians Code initiative by from Americans. They services has using them and to GetCalFresh a government simple, or food Nutrition minutes streamlined reforming notable process XX% XX and access case led PagerDuty has as to X that accessible easy PagerDuty.org more nonprofit the Supplemental Another which SNAP, the access to program, America, to focuses gain their to are use use to make support

seamlessly and experience. our that can product customer we perspective, of a impact stakeholders recovery business to way. help and a and capabilities respond automated quickly drive page brands launched this quarter, proactively stakeholders capabilities customers' progress new an and In status Response, accurately responders launched service faster so and revenue number This on impacts manage opportunities intuitive, enable advances From business more update to responders that traditional allows issues evolution customers we needs. in fully Business July, real-time to which

to contacts DevOps matter. in matter we more find organizations during for enhanced provide and capability Similarly, our the right team they incidents the large IT easily experts escalation subject can and to faster improved that policies respond search in so and moments navigate team QX,

we our bench. deepen market build our to To further continue on leadership, leadership

having and our Uber, During the new appointed to continue Herendeen. leads efforts generation our and to at CMO, we large and growth companies, quarter, Yahoo! now brands demand PagerDuty led comes build to and Julie teams our including Dropbox, Lookout, scale a Julie marketing markets.

proactively Chief we invest our we to the in support As Chief to our Officer Officer. People coming will a growth. In leadership a adding Revenue continue expand business, we anticipate and quarters,

team our our we Overall, quarter, to benefit and partners. users, proud and has what I'm strong accomplished another of had customers

We add-on adoption rapid our and by in continued enterprise are products. encouraged strength of

see use new and continue expansion, self-serve products We by our aided high-velocity growth and to new motion. geographies, cases sales in

executives. through XX conference on the where X,XXX our hosting highlight to which like place and developers I'd fourth user will we over September takes technology summit, annual XXth Finally, be

are new Stoddard practices of from to investor with by breakout to including learn week Cynthia an Jeff all Twilio, best innovation community, Adobe Yuan innovating industry led as We Zoom, host with product action-packed practitioners as leaders and excited the sessions Andre well We Iguodala and platform. PagerDuty from. look leaders, we forward Lawson of Eric and our including can

Howard, the who'll turn results. now CFO, the to Howard? call like I'd our walk that, With through over to financial

Howard Wilson

Thanks, Jennifer.

second our fiscal with XXXX pleased are quarter We results.

second to the XX% of our for beating revenue guidance. year-over-year the end high Our million, $XX.X quarter grew

our healthy all growth New strong to geographies product and adoption customer acquisition, new in international results. contributed

exceeded our guidance remains a non-GAAP margin of gross Non-GAAP share. non-GAAP at we by coming EPS at and loss in per $X.XX XX.X%, strong $X.XX, net

year-over-year, XX,XXX One company year-over-year; and is recurring revenue such XX% up resources with quarter growth enterprise Fortune software an demonstrating a up above the global global provides the segment. services. customers, with in which management $XXX,XXX, our strong ended annual and XX% customers We XXX human XXX customer

They IT communication multiple into use teams, DevOps health and deal productivity of services. visibility a PagerDuty with OT to team increase all total across use across and increase a modern and the this X improve the figure them a benefit landed traditional We quarter. PagerDuty teams, team. both multi-year They

scalability wins are notable regulated where highly the relationship companies both services included us. deepening in Other their financial with sector in in factors reliability quarter and the

well our of world's noted, the strong largest proof demand digital Jen are points These disruptors built operations. enterprises. for As platform as for the was expansions real-time as

both has Our our XXX%. past number is our while net revenue we this for retention the to was XXX% for vary the quarter dollar-based company. And strong revenue net been a XXX%. and quarters, industry X retention above In number quarter-to-quarter, expect our

revenue international year-over-year revenue. XX% grew Our total of now and our XX% represents

EMEA APJ, and continue these to in continue excited efforts our about be expansion growth revenue regions be strong. We and to early our in

X hundred In our stories quarter, pleased several conferences, with their customers Connect attend hosted London shared we the developer was I and attendees. to London Sydney Connect. user Connect and where

PagerDuty Monzo bank. dependent experience to support has built is and Bank. industry financial Monzo was mobile-only X.X on a those customers. use of XXX% and is digital than a services, million more services business in seamless the their a One they for disruptor Their

Cambridge our another Cognition was neuroscience digital enhance a case: into that clinical using software is use research well-being. mental to validated platform and customer for They're company brain new technologies developing at Connect London health featured work. a

infrastructure, health acknowledge IT In help PagerDuty to ensures clinicians addition status policies to immediately the PagerDuty message self-harm sponsors monitor suicidal patients. that using its action company to and and ideation, prevent notifying utilizes is using to and need to the of call the actioned. escalation monitor in the take The to

on turn to will a results. financial results I'm these I that, non-GAAP the basis. providing With detailed

reconciliation with release. between non-GAAP found can earnings Our along results, and results, be GAAP the our in financial GAAP

quarter was of and line non-GAAP second the gross QX, margin In was XX.X% last year. in with

DevOps architecture, success approach production customer approach model. drives support Our native and cloud efficient and operating our to to programmatic

operating gross growth investments business. make margins strong of our leverage Our and to us long-term allow create the in

gross this on XX% margins margins our We between remainder we business the to fiscal within of range gross expect XX%, the and stay have run for and year.

Turning operating expenses. now to

scaling leverage, to anticipate make we investments to focused While our on for the we remain continuing growth. improve operation

will term, expanding go-to-market faster we and long at anticipated our revenue our which a over the our investments force this expenses time. Operating than expenses, rate Over total grow sales in operating anticipate operating margins will improve programs. reflected that quarter

XX% This $XX.X by go-to-market non-GAAP operating $XX.X support strategy, with expenses our was year-over-year increase being public innovation a a year million product quarter compared were driven to Second infrastructure investments to line made and in ago. company. million continued

value compared been Innovation XX% million a us will ago Non-GAAP top in as research real-time the same $XX.X has be operations. priority to increase chain representing an move year $X.X and were of million we the development expenses for continue and continue year-over-year. in QX to for period, up to

We the of remain revenue. expect the but year as a R&D the remainder roughly to increase percentage same for of

QX and Non-GAAP sales expenses compared were and XXXX. by to XX% QX $XX.X marketing of for million fiscal grew

we call, year capacity. earnings discussed our early half As our increase on we the first made of investments QX in sales the to

And expect see for to improved time, the sales force our as would grows. operating the our year. modestly more we over leverage remainder of subscription expect expand We to revenue

will our in we investment the perspective, marketing significant industry annual quarter. a host in is which From summit, conference, a PagerDuty September,

making We will additional includes our will above-the-line in promote QX QX. into which continue investments brand, advertising, program be spend and to this

Non-GAAP XX% administrative were year-over-year. the for million increased quarter and and expenses $XX.X ended -- general QX for

As growth in earnings the in call, year-over-year public G&A in count of we made I driven mentioned in company. and QX systems investments our becoming by that was head anticipation a

relative G&A as expenses a revenue. sequentially in decreased to QX percentage flat and QX was of

but of of We the a revenue. over G&A expenses to to expect percentage the remainder year continue as to decrease increase slightly

$X.X of same loss Our million compared was in quarter million the year. in loss a non-GAAP the quarter operating last $X.X to

margin the is was to negative The in to company. operating last largely of operating G&A period public year. QX in XX.X% XX.X% investments and due support same becoming negative a margin in Our decrease in non-GAAP

longer improvement Over operating margin. expect we the in term,

for Non-GAAP per $X.X second $X.X a loss a $X.XX the million of quarter loss in net year. to loss share net per second the basic compared net of of last or share quarter non-GAAP of million a $X.XX or loss was

the Turning raised of by losses. slightly the XXXX. to We was year-to-date quarter up investments, initial public $XXX our end by the the driven proceeds This year equivalents ended primarily operating offering, balance and offset fiscal in million $XXX million cash, from our in cash sheet. with

Free used margin million in year. was prior having XX.X% the flow timing We million compared $X.X due cash to in Free last in to in last changes. to $X negative positive million QX in capital year. working year compared primarily X.X% cash flow in QX operating compared $X.X was QX generated cash to flow $X.X million negative

we office free short of are In year, our cash expenditures a related or positive we build-out. number capital operating in flow flow. of And the the don't positive second half to the term, planning expect cash

in expect While it capital and cash sustainable continued we in term, capital and and as towards expenditure long make linear expand given working our free trajectory international a we U.S. be in not progress to the fluctuations offices. flow period-to-period billings may

in the loss range the guidance fiscal per year full the end million million see to $X.XX expected to year the the net and third expected fiscal Moving the of fiscal for to of and Revenue and quarter of XXXX. year of in would for to $XX.X is on Non-GAAP for the $XXX $XXX fiscal third is range be the share million. million XXXX full in be $X.XX to of the to range in XXXX. $X.XX for third quarter to range XXXX $X.XX fiscal our full $XX.X quarter fiscal

fiscal for conference Bottom and line year XXXX are spend cost user respectively. XX advertising. forecast million full the to QX program million, and impact the include for of of expected our above-the-line shares Basic XX outstanding and in be the QX

any take to happy are I of and your Jennifer that, With questions. Operator?

Operator

question from JPMorgan. Sterling Auty first our And Instructions] with [Operator comes

Sterling Auty

Hi, guys.

know down. kind the look competition if quarter, per an does couple and of fluctuate, quarters. in to see of but with versus pricing Thanks. of last net trying guys, issue came quarter retention of is the rate it becoming the I level So deals expansion kind how the vary

Howard Wilson

Yes.

from company. is primary of expect And terms retention our or of net did XXX for couple for of to our competitors we see in we though number points respect the A fluctuate rate, churn to is XXX% industry downgrade and quarter-to-quarter. that dollar-based number to strong a QX, note -- quarter. a couple our with see So within the do

this characteristic intense hiring. quarter think was us is a for I other of And that one

team sales this ramping our have force fact, we -- in of compared we we perspective, proportion sales highest our HX. years a as in prior hiring quarter to front In our from loaded

Sterling Auty

it. Got it. taking for Thanks the appreciate I question.

Operator

next our Hedberg with RBC Capital And comes from question Markets. Matt

Matt Hedberg

over number the guys. Jen, of the taking the launched new a products attach, question. top for Hey, my Thanks on year. you of past product

about another examples. one couple call, You this a talked in

at just there overall or on attach one be when in eye add-on products, curious, of of more look of sort family we you an from am an these demand should was perspective? terms I that keeping

Jennifer Tejada

automated We Intelligence by are customer on-call automation. we're next to products has learning beyond predictive seeing. step for proactive to natural response use leveraging the and their are from environment, were Good encouraged already a machine their of in that that new you. and that looking Matt. particular Hi, is product on the Event Incident Modern to really sort hear simply Response becoming improving more more by adoption

all senior of and And some suit developer our operating see the whereas sort that suit personas products we also of the products other more of community.

of are as they next Intelligence. the sort But I for product on different there our courses. for think, of sort So Incident and logical is Response bigger Event step, add horses Modern customers

Matt Hedberg

I lot deferred And month one then, think, the But pretty indicator. billings quarter. - the That's revenue billings we sequentially. is about technically, you great. accelerated for it It XX talked still, know I Howard, a this strong you. like talked as looked best trailing probably

Can you monthly that about of think given remind we co-term us and your should the calculated fact again billings contracts a your how deals? customers lot

Howard Wilson

customers our up then those are we and do with revenue associated coming billings customers because [ph]. fluctuation it that pleased Obviously, create that do few acceleration Yes. to Matt. have your have who arrangement To And those. with Well, we billings do us. initially which the fact see on we the in period of contract, in of end we a thanks, co-term some with point, which shorter when that then items from we're will when month-to-month XX% monthly do a some nature annual comes includes so

But of basis that because tend that things get factors does mentioned balance So the to view we helps fluctuations. those that a sort around our some it's of one of these move in because trailing to renewals. out seasonality it of those do of including I again, look terms on at

Matt Hedberg

lot a Great. Thanks guys.

Operator

from KeyBanc Owens Capital Markets. with question And Rob our next comes

Rob Owens

good Yeah, afternoon.

a to couple the you of little customers. want again Can net is churn much point? more expansion. during product-based Just how little that of this a maybe at that you drill Would bit with clarity the are did downgrade on or help into down versus hear say with success understand love you seeing us renewal and seat-based where rates. a I quarter the

Jennifer Tejada

to hear Rob. might nice I take question, that from you. It's

to just had clarify So in a want like our Yes, that and was come I seeing Howard competitors in off is business of platform churned QX. couple some we of and to a what always alluded ours, which customers go. you're -

But our seen we've with churn in added particularly customers we're number quarter $XXX,XXX the this remains still spending in of that proud over enterprise And expansion we particular, where best-in-class. XX us.

the I to majority we products I of see also last product new we've adoption new we early. still which the we're point quarter, out would what that across -- user that underscore strong about growth. excited we're would just I'd But is said cases. use expansion, just those our and seeing continue are that expansion, drives And teams seen. think

on new think advantage taking customers automation guide next response. But as revenue or time their of products are reduce with to those and breakdown to by their a and use modern maturity don't about excited to we and incident cost We and seeing share the machine to associated what level, risk operations learning starting we that interested the very information.

Rob Owens

you're clarification internationally, on seeing there you Great. Thanks go-to-market unique from anything there overseas? the with localized a can competitor the or talk different two, And churn. the is about success landscape? any competitive for competition Number

Jennifer Tejada

the it engage that's are in customer like is go-to-market is think of we accounts a North the across Most America. with case our base. I and greenfields, lot

technologies competition to and to lot really some to really the time them see demanding we from emphasize complicated. as that large just time a see for improve and still do how I'd we it are phasing getting are of customers requirements customer more nascent a market, to time, when it While their through takes respond

in years. proud for in new the We're teams and only that EMEA of both X really teams have we're Those about with seeing market growth APJ. very been

those markets. of And cases are interesting use most some out the coming of

vertical would I We our to of see every is across similar about also very different and in North that international, of kinds just Again, just the adoption single reflect very horizontal. platform it America, teams. across

Rob Owens

Thanks, Great. Jennifer.

Operator

next Stanley. [Operator question Instructions] Singh And Morgan from Sanjit with comes our

Sanjit Singh

I higher, Jennifer, had question, just a strategic a if guess, will. I you

lot call of So application I of terms the But partners. of lot made A in of the the management other acquisitions strategy a vendors monitoring these it of side, the performance are we go? ecosystem, suppose right see side. the a in strategy, IT longer-term is and space, your way the partnership on a operation lot the of consolidation, couple guys monitoring performance parts that in is with monitoring -- to performance

you get and like of enterprise? Or and functionality there. that to more in platform start a sort Just as PagerDuty the do more into and your try just play want you platform in pursue thoughts bring more to the higher-level consume of

Jennifer Tejada

our have see for Thanks correlating cetera. different environment, third-party really of to APN. that's becomes to independent, question, part environments to the a we includes important and customers all monitoring ecosystem. the points is limited physical It as security, in increasingly from What the et say within that ticketing, not events And I central, strengthens it the that because it market, would Sanjit. consolidation our position particular

correct like New of providers. AppD, Relic, in well. And you're Cisco our we them do the so And customers that APN fact, with are partner as Datadog, most

of those So in term, complex is. long we're leveraging environment the complement. right what's how not is there's helps And XX how consume very leveraging now we the us sense platform a it years about distributed of data the signals that what's happening correlate strong just to as way or and think to of really make regardless we're in the happening moment,

and on thing would providers of we're the or different is approach focused the very say, and and APN is which that providers, monitoring log traditional I second really the the work orchestrating people The from that itself. automating intelligently

the learning runs platform from the proactive, and capabilities is next providing to on predictive it more an time teams around. issue opportunity or then every platform, the the time So an

think, strategy, people that actually and more really is I And that be, organizations ecosystem is even orchestrate fact to continues getting them focus complex. important part though of our and their helping effectively the our and a long-term engage on the the

continue of a as one particular that or towards in or ops. ourselves type to So see capability central ecosystem we subsegment as bias to an being opposed a

Sanjit Singh

Understood. And maybe architectures, standpoint services-based, of more sticking application customers those just that standard impact how with that, a as move more of and these micro sort does PagerDuty kind from longer-term Kubernetes to in container-based, type your themes, positioning growth and view?

Jennifer Tejada

So complexity been it because a that monitor, of day it for of containerization day another creates PagerDuty so has to great customers in have far doesn't actually contend out environments basis. but some with to the and on layer our replace legacy

And have the change customers, disruptive technology the pace technology to of complexity say deal accelerates with a of architecture and as of has hundreds to cloud-centric new legacy mix with younger you day, impossible because changed, deploys traditional which XX, doing they on-prem, I even it some the you manage. native, all kind our have and of at and would that people of make hybrid for technology, some XX,

challenges, and So to development, in and distribution application isn't come I would technology say, of a digital architecture. manage. with containerization's easier more, the transformation sort for you're set it alongside cloud to do behind yet of good of your of the to this kind getting and containerization the trying innovation different any us broader that been There's sitting you're investment and complex of a actually where just shift to trying umbrella tailwind

Sanjit Singh

thoughts the Jennifer. Appreciate Great.

Operator

And with our next Bhavan Blair. William from Suri will question come

Bhavan Suri

runway Management customers, how larger remaining product get think and I penetration core idea to an product. On-Call a Thanks guys. the seat you there sort love to Hey, job taking my on bit the questions. quarter. wanted of on think of little the within I'd core I the for additional If about I sort when about a for customers. chat within count the And guess of you average seats think you look opportunity perspective nice the

about some within and seats size that got think attacking deployed the XX,XXX love what guys than the spreading. customers of about about sort base that how opportunity You you sort existing that opportunity think more and to think of you of might be. I'd

Jennifer Tejada

organizations most natural we about related is, the I have Yes, traditional customers then a security single out. way is and is cetera. expansion, the et We or that don't think point of operations, developer teams. like in And organic customer for support IT our expansion, starting customer this think you that ops see into sold

our of day-to-day not responsibilities that that real complexity in All are have still have customers on employees that time deal PagerDuty. operations their with

how who it our use we to of at can think existing work making our core would works. as products. kind we products easy developer as significant within to customers base continues our simple hard don't be opportunity the continue expand products understand is and very to through a to So that opportunity I and on you add-on well have new script acquire say be the to to What

customers cases like sort opposed applied includes for removing can out to jargon the That also figure and use be to value leveraged things and products have as themselves. allowing what's it of articulating than from of and typical how to sort our ELI different

Bhavan Suri

like have systems and third-party their That's a Got sort work of there's of in, little the right? AI Ops Dynatrace addressing so I more AI data opportunity. sources platform some coming the helpful. of monitoring opened up and Got are the think bit And guys with I to it. asked guys about then it. you entrants, competitors, on someone want So consolidation. know some to But Ops touch of

you pretty guys deals? Or kind sort VictorOps or that is consolidated in guys Are see are on that at whatever. of customers it guess and traditional all? I the that space? you entrants much you been acquired any seeing seeing Do AI monitoring Ops in of new have like these of or entrants still

Jennifer Tejada

deals uncontested. where our replacing we're greenfields So are channel. that and all, PhoneTree first There of a want lot are most of of still

PagerDuty Second of people that intelligence. we're competitive to PagerDuty those fact, all, event not mentioned in are all. a or leverage you Ops I would for use management at way event things like as and say And all that seeing AI beginning

So separate quite single events our a not events a then see those And whereas I X Incident set people And way. you a very own make strong Intelligence incidents event out of through a to them as of people will is with it. that important be teams or complicated very work X like handful data maybe of what's related that come there's a sense platform, signal. APN and team in a that look a signal their would correlate need on PagerDuty traditional hundreds in pushed to a then each I they're environment order together orchestrated technology across think coming and of Modern to but single effort consume to don't set and to working from of Event into instead silo consolidated Response, just

our So team then insights to and intelligently and actions very matter workflow route subject and teams right ability to is the different, the experts direct and people right orchestrate -- is orchestrate differentiated.

time is the important the things a again, that for most AI the The of in abandonment in world. relative thing the mention the same experiencing business We we is volume or moment. part prioritize the where what's changes in context in with technology about helps people complicated responders shopping immediately, different business, understand cart last transaction of for that, I'd incident, talked moment. the happening helping at that they're And spontaneously, Visibility are which the quite instance, to changes Ops

Bhavan Suri

questions. Thank for helpful. there. guys super Thanks nice was you, and my taking job That

Operator

question And Davidson. with next from D.A. Rishi comes Jaluria our

Rishi Jaluria

help in that start taking XX by down execution Hey, any questions. better Thanks terms or result a Maybe the of of sales for getting in understand, and my on go-to-market wanted there? drilling and contributors adds, the guys. $XXX,XXX to to us was other now just XX I quarter.

customers that seats? then was weren't those and understand, PagerDuty directionally mostly help And maybe of with us existing just both expanded before? new customers PagerDuty were that that customers products some net Or

Jennifer Tejada

use or teams is new customers second $XXX,XXX us. new Thank existing are but because mix cases to customers remember. I'll or customers part are existing question dev that customers, new teams your over The the to first it's a within easier majority net with products and of you. answer within expanding relationship your or their of their new

that them. about enterprise segment, mid-market And the scalable, it to fact driving there if available think market not platforms just that are one of other and the from what's resilient, demand think is secure I in strength I and

have solutions and customers or point been have those solutions not of successful. Some internal tried

The that disruptive, thing which mid-market I that the would fast. of even most of support investing trying cloud They're we that adoption is some and migration. heavily readily. A them in be tend say players in tailwinds is facilitate kind large, are trends macro other of these expansion. we're to transformation, of lot move or companies which very those And large really to digital seeing, cloud are involved

advances, as these there of are in over third enterprise And around as then I a they grade and think and offering. them excited we the We've to than of enterprise more proven fact also XXX a is half say had building their maturity and would lot about are road we from operational credibility map because the go. feedback that last, for I the how somewhere the XXX scale of Fortune customers are Fortune delivering the

Rishi Jaluria

other or in really products, of had Intelligence, maybe just Got reception revenue -- about or that not Analyst then at off, are in helpful wanted Response, helpful. the but customers, or your it. Event some you is that. I And that even people platform story you've I early ancillary think of on attach pieces to the $XXX,XXX I I for perspective at just part mean thought have thinking Incident be really the excited but some really anything would of just Jennifer, some gets positive a the to just attach rates something, year like when get That's the something what once you or that clearly think any even even given on rates know, signs point said breakdown of early like but and kind disclosing with the take be place, to starts Day

Jennifer Tejada

an helps the get the to go-to-market but need have share just so we've to Business it's earlier out manage products or And allows technology market intention this I Again, Intelligence year, Thanks, that market data. in we to or At business are feedback this there. their I engage summer, customers appreciate followed. just other We've a and have your point in released products last Event early. which these into think in don't been quarter, and with drive the released legal issues Response, opportunities the ahead all incidents not of that their and to response they just challenges PR. leaders customers corporate time,

and it's data. don't think where from pretty And a so intend we attachment share to offering, right we I diversified now, are

Rishi Jaluria

you Thank got much. so it. Understood. Okay,

Operator

at no for now are there I final time. to conference over turn back management remarks. closing this will the And questions

Jennifer Tejada

And time at our many forward and for and have night. later seeing much, you, upcoming entire to Thank you summit everybody, month. Thanks great for and team community for the join call. PagerDuty We another you solid our very of customer to this look quarter. the user a taking the thank

Operator

And that concludes today's conference call.

You now disconnect. may

PagerDuty (PD) 5 Sep 192020 Q2 Earnings call transcript