PD - Earnings call transcript Q4 2020

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Operator

Good afternoon. My name is Chantal, and I will be your conference operator today. At this time, I would like to welcome everyone to the PagerDuty Fourth Quarter 2020 Earnings Call. [Operator Instructions] Thank you.

I will now turn the conference over to Stacey Finerman, Vice President, Investor Relations. ahead. go Please

Stacey Finerman

afternoon, today's Good quarter you joining for year-end Thank call and to on conference results. fourth discuss us financial you. thank PagerDuty's and fiscal

and the are With our today's Financial home today we Officer. like Wilson, Jennifer from our there some conference call Internet there are Chief for that apologize also been Chief with needed, is please Executive would if informed offices. mention Tejada, provider the technical me I Company's reach us Officer; call from have PagerDuty's any difficulties to out been increased on clarification and I We use. to joining Howard have and remotely Chairperson difficulties, that you investor@pagerduty.com. at any

include call made on forward-looking this statements. Statements

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

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

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

use or non-GAAP which for measures other example, use could financial our usefulness companies measures For may the as financial of may may calculate evaluate tools or all reduce their differently comparison. to measures performance, of non-GAAP

factors SEC. recently our results these earnings the including most the non-GAAP Form the financial and on is previously filed time-to-time, Risk in in that and titled from release. other filed we Commission are filings with included could Factors information Further financial with make the affect Exchange between in section available Company's Company's and the reconciliation GAAP Securities XX-Q A measures

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

Jennifer Tejada

Stacey. you, Thank

the We unprecedented the and you being pandemic. and all COVID-XX call are as We are today. you impact we an well working confront in hope appreciate living the on and environment of evolving global safe

PagerDuty, home protecting it engaging of and they number people, manage our especially to supporting and communities At as people, we the relates our a support impact already event virus. enacted measures respond effectively the we through restrictions and a crisis travel our we to as of them economic operating customers enacted place, XX, in can framework. from On have this, the undertaken we've also spread policy flow a and governance business mandatory March to doing as alongside work to and

our products helping and for we extent incident on unplanned well we're remote prepared response, able many customers, work a home. of them that to Given as the work transition to focus to distributed design great such were work, from we for

As to some developer ensure PagerDuty and interest uptime. distributed working have seen ongoing digital operations, teams and shift leveraging performance to in

are philanthropic and aid and companies providing social team sharing to to crisis managing through PagerDuty.org. Today, we are announcing impact surge digital their supporting off their community, them response them addition we program, our XX initiatives several healthcare kicked best In with environments teams. in our in to that we've practices platform licenses

increasingly extraordinary, in on difficult true our culminating and record-setting market the forecast and It's clarity days have makes the cycle it locked ban and subsequent the federal market few last of downs, fluid impact early macro and area travel business. environment, been the impact The to the medium long-term have this disruption. week which to on the metro too

of see to change nothing early signals, date. the indicators by And we some the day. material we is This changing demand situation in that's while see

our software industries a too revenue, of how While And e-commerce significant these one-third of meaningful to services. industry fair. early in to business and which it's subject we business is outside have will concentration call not and represents our retail, tech, financial

or from school Additionally, business measure from the for mandatory we home productivity market come ongoing may illness. cannot and potential work closures our and ignore policies, that decline disruption in

companies have unwavering even digital in mission so these addressing remain operations is are experiences current coronavirus, PagerDuty's poor and result the overnight of Outages core expertise. in We our distributed as centralized Thousands and to effectively. financially manage operations help their customer unacceptable, of a more more challenges environment. teams been

manage we examples market, scalable of estimate and new now resilient licenses unplanned more early to ever. rapidly. customer teams self-serving know addressable we customers platform to pioneered remains mission-critical meet million, when large We've we The in and our at expand $XXX work than prospects serve our seen and recently

early What tell customer know too the or this help But and efficiency, trust is and to is them coincidental. customers achieve. our material do savings we we experience whether us value it's assurance cost

again and to that Turning users for and We our successful adoption fiscal XXXX. revenue a major the per the This delivers consecutive underscores recently of surpassing users of our PagerDuty across verticals XX% and revenue geographies. year. of strong XXX,XXX the both growing by XX% sizes quarter, increasing year-over-year to full-year QX average year third increasing all platform on this revenue user customers with the our year-end milestone, proud value our results we're over platform achieved with

to mainstream fiscal digital in manage DevOps adoption digital operations management. a adoption we create our progressing us as to XXXX transformation continue lead increasing for and complexity, tailwind extended Cloud in need

for establish increasingly available customers. customers helps with trust currency PagerDuty As their trust is our sustain and consumers,

During we the products. uptake of also year, meaningful a saw new our

across to orchestrate include these modern distributed teams. As a response work real-time reminder, incident

for for customers, new AI new productivity. analytics all platform. for and from again advanced operational Demand our and our awareness optimizing products and of unique team visibility data, learnings solution solution strong particularly leverage our intelligence, and as from health situational automation they Our was app enterprise

a trended deployed ownership, deepen like health, continue event service market QX, dynamic across first accelerates advance we new rules In service top incident the features subscribed event our directory, customers than XXXX, partnered service in roadmap history, for within signal We of service information, service we Of includes to new books. information and ownership them rules and rent new current XXX one fiscal performance, This full-service repository motes. which competitive more to teams. new history, our objects product. XX service-specific our

released Quip beyond the Salesforce connecting We Commerce Salesforce to customers cloud by latest version integration, go use previous new our more. cases opening enabling to service Cloud, PagerDuty up Marketing Cloud, and several of integration, Salesforce our

to the IT teams teams hybrid with environments very challenges advancements DevOps more both ops various for and teams We models. companies real-time processes. have and operating different centralized also released enhancements are address of customizable make workflows These flexible and where

This Business management real-time seen leaders supporting allows the centralized feature on distributed and IT is business in customers app seamless in to ops of work, relevant on PagerDuty platform. XX% leverage DevOps particularly of mobile use launched for an that their this on teams senior at receive context this to have all stakeholders new functionality health time. a easy and in feature use the Response already agile this eligible like Business July to device. We while allows team also Response coexistence set.

innovative the QX, companies. we to Booking.com, Netflix, also enterprise and TripActions while Vanguard, most make to ADP, In world's American [indiscernible] the in Peloton, name with progress a expanded Express, IOdesk, CrowdStrike, We few. Snowflake, business continued landed or Shopify serving

led XXX was for initiative stylish, with and top using and a was the Response. time-consuming. Incident homegrown ability variety signed new in The the the customer was an to manual Internet affordable CTO company XX systems and expansion home best customers we legacy disjoint furnishing, using retailer to deal already enterprise, system platform. to Modern looking its In delight for Fortune Known that breed transform

a significant for which we not $X I cost groups us competitors million estimate Now, cost mentioned substantially alone labor advise year. reducing team, in resulting to The incidents be savings, automatically offer these capabilities savings. that time could in to comparable costs intelligence, CTO per the mobilize over

Chief Last also deliver Justice, Officer while at to for first Julie us our has land leadership our and on built especially motion. strong already in leadership execution, expand enterprise and high-velocity Dave our our and strengthening December as sales scaling our mid-market. people been first and new Chief Herendeen Revenue the Pivotal Militello, help in our the quarter, go-to-market CMO, value is hiring with on closely Officer Dave People started business. foundation, focused formerly we and Joe on partnering growth

overall pleased performance tenured in [indiscernible] up to the and and to to performance bringing note, positive the and industry new applied same programs strong the salespeople initiatives In our including standards. and saw on high several for of tools to I'm has enablement a a that in continue support we hired next our put bearing results. sales Sales rigor has of recently are remain new quarters, all sales and past On teams place we Head focus process. teams deliver Dave excellent Operations QX, we the standardization two

team. first, continuing dissective we and the fiscal suite, reach we XXXX, Looking remain enterprise extend to IT on third, real-time while are in second, three beyond continuing current priorities, ahead platform of and win for mid-market; order focused the on see challenge we environment. the opportunity the and and to DevOps In in becoming both us, our tremendous focused to work; to expand opportunity

growth and and the of with largest companies, speed present customers, deploy the largest mid-market opportunity. uniquely PagerDuty being advanced scale XX First, positioned security enterprise the with that complex features solve and XXX of the of problems world's companies is to to Fortune and nine balancing XX% PagerDuty Fortune and on world's and significant use and resilience transformation. to rely the nearly as easy demand continue automation

the with led standardize 'XXs model leaders high retention growth has the combined platform Our platform. on both integrate e-commerce in and industry PagerDuty tightly to user-friendly in rapid our approach as to

PagerDuty essential world infrastructure. that demonstrates become an of enterprise the enterprise in success Our has component

many company example, human years Fortune customers our team do a a software growing self-service resources started from of in user to PagerDuty users, XXX for They year. land began large For this using XX of developers mobile responsible applications. ago, like a two X,XXX

leaders, journey, mission-critical scale stakeholders PagerDuty's management and anticipation continues thought and and experiences incident analytics, them enterprise-grade at reliability growth of feature-rich Adopting lower in - and solution the innovate faster, ex-customer an stakeholders it they leaders that all visibility a to a with performance launch, this real-time strategic product work, digital as provide urgent gives and well times. operations orchestrate less and moment. replaced transformation as Company context However, with great platforms enable In as product, and management require every digital could into their bundle. cost automate our platform and

Second, focused across, real-time medium platform the becoming on companies. work we and small, for de are facto large

of some discussed or services solutions. that of or we and providers route in to the operations. understand are companies IT non-critical all valuable As These there help services, with parts before, logs that are standardized monitor which ticketing analyze infrastructure many we've workflows use day-to-day our health

that distributed This coordinated need However, especially time-sensitive, and for unpredictable, companies solution and machines team, face automated when are that in teams is issues applications important and for way. customer-facing orchestrates they a a for revenue-generating and teams responsible technology. data real-time

practices PagerDuty best a people the uniquely solve addresses decade of information machine automatically and leveraging the and by as bring data right occur. to together needs they problems address learning, these opportunities with right

delivering competitive cloud 'XX, date, in Response, To mobile technology our In our box largest platform investing of Directory, Service moats, use these and category. we across Business the and experience ecosystem in for scale, interoperability user and integration resilience at PagerDuty's security FY our the the include the best-in-class and out moat deepen of ease on-prem trusted environments. reputation

investments ambitious Python an challenges on users and execute experience including that remediation learning ways, year, automation new user leveraging to in in face and support AI. to other and digital developers improving continue additional this address our functions. ecosystem our application across features, machine roadmap building further product critical DevOps, We customers our These and expanding transformation,

is platform expanding beyond and Our DevOps continue IT third priority to teams. our

XX% initiate into apply service usually our reputation additional DevOps play. other customers customer customers within risk issues when service, especially to in PagerDuty While mission-critical of come security with work and functions like impact PagerDuty, that

as with operations. partnership in integrations for security and to use As and PagerDuty invested cases as Zendesk, new we've like for PagerDuty well customer demand, service increasing support Salesforce we've in workflows seen

to see expect in functionality roadmap global by DevOps to encourage advance us and more essential can our in company for and information is software insurance An of investment build ecosystem in our their You robust provides top casualty a these PagerDuty, areas through to power our on APIs, continued developer businesses. this customers example partnership. its used strategic property carriers of enterprise to

adoption the product utmost expanded of expect to the this importance real-time cloud manage to more customers their their customers and customer. development recently, information as using representatives PagerDuty their the team, then Reliability is PagerDuty Company started who inquiries perfection and inbound quickly More cloud effectively. long initiatives. now context operations the engineering Company's for and with customer support the from time to support are rollout in empowered PagerDuty We

of In company unpredictable as pandemic, us as prepared well and built all the an unpredictable maintain real-time, the PagerDuty's for our environment coronavirus to heritage work of a midst teams sees now continuity, business macro incidents remotely. distributed

of the the We of to we committed is provide the large our people world we volatility, To And the building and down. In to our we are remains us. remain our ability enduring in date, situation and clear-eyed coronavirus rest and the and market front focused service best not customers. to long-term still an when of company we of opportunity, about high diminished are are is objective pragmatic. uncertainty has see that customers optimistic expect. PagerDuty remain for on levels and at our reliabilities services

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

Howard Wilson

Thank Jennifer. you,

pleased fiscal new are with of Growth We by users for our driven new the new $XX.X high customers, Revenue increased our and XX% fourth to the product adoption. guidance. year-over-year fourth beating end XXXX million, results. quarter was quarter

at margins non-GAAP Our XX%. gross industry-leading which were are

Our negative our ahead non-GAAP $X.XX EPS guidance. per came in share, at of

last $X the seen more in XX the we Both enterprise. taking Customers these in years. to had line growth We over flow of total XX% above customers, in million a rate XX with and basis of the demonstrate we've cash Once over of customers, us XXX managed metrics a XX% increased by in on year-over-year million with $XXX,XXX customers customer QX, increase year-over-year additions in upper We the quarter. XX,XXX to mid-market to quarter. operating two again, rates our fourth year-over-year. net saw ARR with with $X in growth cash in IRR strength a XX%

the retention of customers' in Our most as the have dollar-based XXX%. This high quarter our and from was are we sales us rates net effectively. churn. net low to to of quarter specific healthy cover attribute not accounts commitment for retention rate to territories represents where decline number rate our execution managed renewal third the pockets We existing

From revenue an trend. per user eight gross competitive are - two-year average a per customer we on see margins increasing continuing for basis. to churn remaining positive quarters below non-GAAP And revenue successive XX%. perspective, a average above annualized pleased revenue with X% our Annual continuing

that continue well continue experienced We productivity. as sales to to sales of levels our programs perform drive have improve reps perform newer our high can our more productivity and at rent who as so reps to

to expect With to XXX% first retention we're land improvements, the within we dollar-based the of net range in quarter XXX%. seeing, a

continues a another Our Once international team perform to Europe, in we sales. line grew sales continue revenue and quarter. with in to XX% had in last we example well again, exceptional an of year-over-year invest where quarter where our territory

non-GAAP These results. financial detailed the to results basis. turn are now will I on a

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

non-GAAP quarter, gross XX%. fourth margin the In was

we We XX,XXX integrations. to that scalable, in are a delivering redundancy a customers levels XXX with high technology can the secured reliable, highly supporting world resilient efficient so proud platform of around and in over complex environment over be

and success best-in-class to our by and margins production, architecture, possible our Our cloud-native support. DevOps customer to approach programmatic gross approach made are

We and between anticipate continuing XX% to deliver XX%. gross margins

operations, we capture to Given look the market areas opportunity that large in digital share. help in invest

However, in $XX we increase, of line fourth revenue operating fourth with over our to the of in million operating XX%. as fiscal of million quarter, non-GAAP $XX leverage. growth reap compared In our expenses the long-term, a which scale, XXXX, quarter XX% were the benefits was the to expect we

in expenses Non-GAAP to an $XX research and compared representing were development $X QX XX% increase million of same for million the period, year-ago year-over-year.

teams. DevOps our product priorities As are real-time in fiscal reach operations de Jane continue platform our and two and to of facto in beyond for innovation. be expand IT mentioned, will to for work invest XXXX we digital Therefore, the

million. number absolute XX% annual an Non-GAAP $XX conference. of million On marketing QX quarter-over-quarter, sales fiscal prior expenses and this QX in were quarter, industry basis, our of grew the XXXX compared $XX expenses reflecting of and down came to by

in our We with expanding intend do experience online our comes customers it when easier business area, throughout deliver this to to build unique for journey. on making capabilities our especially a the customer investments it us, to

Given the improvements we we've sales in continue sales enablement. seen recently will in Salesforce to productivity, invest and

significant million Non-GAAP XX% for year-over-year the for quarter. increased and general the XX% year-over-year, administrative QX from and increase, the were reported a $XX we expenses in improvement third quarter

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

was operating for million the quarter in last a of $X X% the year. negative net last net Non-GAAP was quarter QX compared in non-GAAP net and or share $X.XX in year. $X.XX loss share same margin fourth the Our of or net to period of $X loss basic a negative per per loss of fourth X% million a loss non-GAAP of

negative operating just in represents cash prior million quarters flow $X $XXX,XXX to year. was to same This positive the flow last $XXX,XXX negative generated compared straight year. the three quarter, flow. flow QX, year. last negative in of roughly quarter the was X.X% operating Free X.X%, cash in the in compared same cash at margin We Free compared slightly fourth cash in over to

million of by as we our expenditures quarter, mentioned, As we build-out to Atlanta completed the new almost $X.X offices. previously recently $X capital million did for the increase

initial our equivalents $XXX year the raised investments, was as million ended capital. fiscal sheet, primarily This balance well million cash proceeds offering, driven Turning with as up to positive $XXX by public from in the working XXXX. of quarter we end the in and cash,

coronavirus. on would a to make like comment the impact of Before on guidance, the moving I to

not coronavirus. material to of pertaining any seen we impact have As direct today,

we As implemented all canceled across Jen locations to postponed, work participation and sales in generating pipeline or our policy temporary from mentioned, have events. either moved home a virtual

to in community. this effort our an support of All

At this time, impact beyond assess the any it is first quarter. difficult to accurately

We to flow. from bookings, to to are monitoring a daily impacts revenue, capital view understanding with the allocation, of situation funnel the top of cash to course and

the When and and exposure industries to as some limited we have we manufacturing business full today. at exposure and we the have assessed impacted our of travel energy, such the hospitality, of look year, highly

volume trial have web at We current trends and reviewed and weekly no time. in have also the and material daily pipeline, traffic our change conversion seen

at to assess is significant uncertainty this the it impact ships very the future arise that could potential macroeconomic time, coronavirus. difficult given from major However, from

Our follows. guidance as for revenue is

For quarter revenue of expected $XX representing first the the $XX is a be XXXX, million XX% to range million, fiscal growth rate of to year-over-year. to XX% of in

the is XX% rate million in XX% million, growth For range $XXX year-over-year. representing to revenue a be the to expected full-year to fiscal of XXXX, of $XXX

the Non-GAAP respectively. QX net range expected the million of and expected loss fiscal in first full the and per share XXXX. shares for Basic be be the fiscal and to $X.XX quarter, $X.XX to full-year $XX $XX for XXXX to $X.XX for million, is year $X.XX in range of the are outstanding to fiscal

I make a want guidance. to few additional about remarks

the assumes year. represents Our negative negative current fiscal we in to XX% the the six year guidance XXXX. midpoint at This fiscal XX% of margin an improvement EPS for XX% non-GAAP operating for of over posted the points a negative

prudent managing as business, go-to-market, our we as we be in plan in R&D, will costs. in Although well investing especially on the

other which and taxes. expense interest adoption guidance of interest a and million new an the includes income, interest for fiscal fiscal million in cash EPS lower the current from decline to XXXX XXXX, significant increase lease rate primarily $X.X $X.X in year also in income environment, taxes a standard related increases the in to in owing Our to assumes

up the for call that, open will With Q&A. I

Operator

comes Instructions] Capital Hedberg first [Operator Matt Markets. question with Your from RBC

is line Your open.

Matt Hedberg

model, demand, to wanted of had made there maybe And guys I better believe said. said drill on more about some not how travel. indication you mean and this more if expand you set guys note, a maybe good to talk early bit much just can you I is is results others that us earlier. have and wondering comment but comment. a are less also, some to QX, then said you Jenn, a you little I strong with - there into nothing up much you you e-commerce I'm obviously, change you - do to a than

Jennifer Tejada

much We We the are you of Hi, you so Matt. as well know your I us thanks well. out and all time And today. a for pretty being And safe in with question. challenging appreciate that it's there market. hope

So regarding question your thanks for that.

reaching that and our at a the the web to we kind like at on seats we normal looks we frankly traffic, In it We us they're looks rate because out new new look all rate. through they're distributed spin on response. for by basis. and as look because emergency about I using things service as and our those run that had daily well think cases, our to healthy, of way to of think teams traditional now pipeline, us some even is, trials, customers or trials conversion crisis

a very deals legal either any super hand, On a other uncertainty. because that's had different month what budget they have we've than or are busy no delay out we in push are or small quarter. number see their would But the teams of

business. material, could like not like could be everyday coincidental, kind of again So be

about help same just change at we pipeline the QX. So But say today. have to We feel we a be material transparent. good time, can't go want to find we the

teams a or the that been healthy rep last of activity the of to couple self-service with in add volumes licenses. And in is capability up the being And couple your benefit lot sales a transaction days, setting spin our new to new weeks. they a the point, require is have frankly, of of customers if want don't new lot sales interesting to we meetings, of last there and very talking it's there, virtual over team

you PagerDuty it you're land the sits or environment vast e-commerce. squarely space in - our through your an when manage think for very in strong reliability looking is delivery that distributed, And in now of like service can this, for help a I in a that's that food surge response has likewise, comes uncertain. times your And majority and reputation increasingly crisis because platform team there because

Matt Hedberg

that think to And mean done. maybe it'll follow-up for a I for Obviously, landscape. how And kind I It Splunk you. platform that it was your you getting bit the talk But get mission-critical always and a can perspective and the to see a doesn't great it that seeing? more given maybe competitive - little anything people we to from of more, appear there little is pricing me Howard, you're I really any strong really about think I any really asks is your how here. Atlassian, a impact gross there get there just think I happening time, know speaks is And of bit there. work because from discounting, a gross margins. the question and performs margins everybody you and - maybe all be strong

Howard Wilson

environment you there really enterprise. the the Obviously, some been terms change side measure often of in than some there's material time-to-time and the see in always in you know we from that And the or market folks rather SMB of no is mentioned Matt. Thanks, competition, pricing of competition. though the in of

last that average value revenue the fact to think the customers I mentioned, go over we're look that trend the it's delivering. I of if are we our years, clear at margins we look the couple seeing user that but gross just for And line think also continues the that when per us up, one, you at

had enterprise And that would on compete that the of value. always studies competitors I angle taken I the even know, think for could a price. $X.XX you some us compete with customers on an We've have we value always And been did that we've who showed had think business in achieve over which IDC million they annual we that done, XXX%. that of for study ROI

larger business there and dealing those are case, is particularly you when think enterprises. a I So clear with value

Operator

comes next Sterling with question JPMorgan. Your from Auty

line Your open. is

Sterling Auty

that Both actually I answer cushion some especially any that thinking provide the Matt, exposures the build some those prepared and numbers Is Or remarks you guess industries? the in actually walk COVID-XX. in estimate, away in in you of to in did smaller didn't from interpretation? into right Did I even your the guidance? impact with you your

Jennifer Tejada

Sterling. if for like. market I'll day-in have the been The and Hi, that then quickly. a last jump several been tell day-out It's question. you off can has is he I days. will modeling scenarios evolving start Howard And This Jen. and very in great we

our our we've but the see quarter, same in indicators all to two look of three that in environment. the certainty so a we created difficult closed tried a can we're used So are business, deals then traditional what look methodology, and things portion at SaaS out also around since it's leading And to could and any have quarters large look our and like.

to do But be we into QX, what nature We tried that we we don't have the is could balanced guide do and we productivity have a good pipeline, healthy balanced. et and tell guideline just given looking market But were prudent be and that. very at crystal of in applied across ball. and where And risk because we guidance I just you we measures, put we've higher the cost-cutting happening feel what's initially, in good will and the feel about cetera, balance the think there thinking the or about a some place. industry around we going - about employee

Sterling Auty

And -- think I that's Great.

Howard Wilson

X% travel hospitality and going industries manufacturing. and Sterling. travel than hospitality today. I like of of a energy obviously, very Jen, taken areas energy, specific exposure, would But look look just of maybe less we something parts that's to sort and of - was the and of and at I are have add at thing revenues kind one our we sorry, when

dramatic factor some So obviously, been we modest some in in change. certain the around able build in try to have guidance we sectors. sort macro to behavior haven't of But changes

Sterling Auty

you retention. And Thank then follow-up, net the for guidance, way. the just one by dollar

and makes maybe retention putting I some initially, that those land starting your of think like deals that sense. very that sounds it expand But how of see out it kind versus to gross was larger settling you taking much of else the is high? where anything size are so the because in it's

Howard Wilson

Yes.

point So to you I think things. of a couple

for the seen we our I we as means does definitely this mean bit we on traction that's lands company I in that longer. seen move mentioned like particularly on so an expansion - enterprise, window as new think positive for been might changes call, us business. the business increase terms have that last that's a good into little runway we've for have since think that which the and more of the of expand where in is I have larger a And seen a

transparent I been said, territory that with did being sales now that you in some the early of we sales made would not that being if of fact to mean, like. have have We - the year, some changes which down. starting we settle half about team did the the pockets we're as covered effectively the is that in have we of

Operator

Your Rob next from question Baird. comes Oliver with

Your line is open.

Rob Oliver

a Just couple.

competitive got little to I call. regarding earlier I pricing. the deeper on just a Jen. for First know, maybe Howard dive bit landscape a quarter's But question wanted Jen, on in last

and a see if landscape feel competitive it fact wanted this confident sounds bit just use a and the in believe if quarter, bit guys you change. that had had if in change about for, get what, it did wanted and as not to noisy, just the any noticed to that a gotten competitive I sense certainly, Thanks. you've more I You term you little mentioned, landscape

Jennifer Tejada

for you're well. Rob, I And hope doing question. you, your Thank

and digital in I a being think the starting from We out change, do not real-time others what of category operations we work reduce some perspective seen articulate a in our more significant of to to in help we're compared that stride hit have our fact, about about positioning there market. and terms the and the management confusion

is very as customers that enterprise in starting leaders effect network within we must-have. through that company we're and beyond other see they who would are at I developer use and DevOps great We a is fact consistent areas. that service the there and and usually start to community expand then and security to land customer say the IT large one a that become PagerDuty a see PagerDuty going a transformation, where to

highly increasingly the solution deeply a think market also world the between of enterprise sophisticated use in into more itself that lower-cost understanding offering. getting in the infrastructure easy difference versus most to I And is the integrated reliable, that's the scalable, a

say I'd market it and out tremendous but land we vast I and we think do significantly opportunity. that, we a deals say large see don't a and also amount and again, under-penetrated, greenfield can where It's of e-commerce. the it's this are over point over that of our just through majority enough

Rob Oliver

towards us you. And constitute one larger you've land. I then, deals enterprise Howard, know been a pointing which upfront those for

the the quarter, any we curious look which at that's if if with much, the in billings in factors guys Or towards long-term of jump long-term this very As solid, consistent to continue? other there Thank something and expect revenues. at appreciate play short-term that's and if it. deferred move we were should I that mix you deferred? was And just growth a we saw like enterprise

Howard Wilson

Rob. Thanks, Sure.

to We XX% saw the customers above we look in above above I Rob, if our have when look pointing now we growth are think XXX,XXX, customers we we a all, So, at have customers a terms in the Those XXX of of, XXX,XXX, the in the XX% of in foothold at number there. - we are that stronger gaining enterprise. that $X just obviously, million. our the growth fact growth

is change that profile. that And going of these to so deals with to be I is in finding that out to - that's going bigger and terms think going larger play organizations

Operator

Your with Stanley. next Sanjit question comes Morgan Singh from

open. Your is line

Sanjit Singh

And Thank if your this around of the metrics time. DevOps, expansion script, of customers during interesting you outside XX% you mentioned Jen for of taking of think team plus one I of on sort is safe outside DevOps XXX,XXX you every the hope the some question. users. hit

different so today activity a plus seeing? emerging platform, of year cases out of versus And sort ago, use you're stand some cases, usage of are you the the platform usage we use the year two the here the of ago? the like as you IPO, sort can is usages, talk PagerDuty years know, to What of a that on how

Jennifer Tejada

for the I hope well. Sanjit And Thanks, you're question.

the So for operations management as teams on-call community. community solution developer say, developer DevOps I were known for two I for would being ago, within and we and work managing years the real-time automating think well a just

opportunity really purely environment, issues, a parts to finding moments reactive to think see organization start software increasingly and identify the I as almost things community the detect to that become of to the right preventative. helping being rest in so that any organization, machine issues engineering drive Then the learning the in of technology. help the the from starts the right has leverage the led other apply business to before way modern can platform to move outcome the connect for orchestrate major opportunities, or ways in leverage they people

customers or And we consumer-facing some time the developer with our Salesforce be for could customer issues. that peers with and platform being digital integration are consumer-facing an product customer starts they're application to use to organization, their leveraged just it have visibility response a customer have context within using the or in to examples to same service able be where caseload that realizing would that reducing support issue

do. they then where fuel about, a have and mindset unique see their we terminals. in security, cases. trucking DevSecOps their of SecOps within operation manage and of really organization oil more talked a their of to one a that DevOps we past PagerDuty for efficiency the large teams proactive SOC, gas use deploy to us everything We've kind distributed center, a in the security uses In also and teams many but perspective And using

for security uses We have physical legal. team a us payments their as customer well that as

finalize workflow across legal trying to to the We have real-time manage across that when team business the units. uses they're software a contracts us company large

of work. figures learn captures, the you burst you in the are the is, a goes you unpredictable need. that organization, that on don't from And know distributed In that PagerDuty everything right go workflow stream necessarily that a common for who and orchestrates forward. it to enables work and people it's It real-time you. out

this one think did things I to was really we year the of And improve experience. our user mobile

and only the of mobile users And course, incident makes an that to more more which we're hearing start easier run it from you are recently non-technical platform more leveraging their team, and PagerDuty. try We going in teams us given crisis in us operation who a have more what's together TechOps been response stories about to center. on distributed and customers to using spin a for historically and network using entire up allows device,

Sanjit Singh

about for it you to And into Very two question don't makes I the the time, of same enterprise could total the environment or one trying sense. it's I'm as how But through, do I'm from more then these coming business what whether mind, my trying if customers think the customers. about of we next over the customers larger Howard. questions interesting, of couple larger for to unfold bundle When guess think and Howard. I quarters. two self-service at and being follow-up in do mid-market business two think in of is, direct the managing think leg I hand-holding, contingency more through marry that. operating or where large sense terms in sort of how more self-service sort of a thinking to a together business that and that's sales presence enterprise in you're the those can another a to meaningful in expand motion, situation model? via take the the customers need about what things follow-up are plan do things the terms down, these that business the way the they of And new How

Howard Wilson

to as always. and good Well, hear you Sanjit, from thanks

on a through that's our the very lands that's actually kind think just been mainstay e-commerce something folks, So the of majority to interesting I the And remind I self-service model. been of or come of think business. hit point our you've because

the able of they two that cover regardless we actually their a about of or customers What we ago ability new being did were to to for self-serve is size. do implemented years regardless whether existing and

definitely using more acquire. we've that customers so motion to of self-service And our seen

In past self-service. within of hundreds fact, had deals within via happening were quarter, thousands even actually we that the this had we

So actually order that online and that without form we making - and transaction sign purchase to any have a then to was paperwork. customer do who having complete or is an able

certainly we there. that had capability So

the we things they I a use. can is we them, of think in. is and need to they is base come transactions our It's continue as But that to educate that to do day on watch of fact stream. that customer see that steady stream mechanism I a online steady available every a the one

did. enough of see Company help scenarios your number right. different sort the a model, second right of account now, have out. assess just build about tried question, into history we've we've We We contingency don't able that ball, us time. don't but how And impacts of out those take to to that impacts think trying number have in scenarios. to crystal data. we of But data of could the the in to obviously, to terms to And be which built a enough modeling, play - real we it's some have - over of We may out don't

Jennifer Tejada

is to that will certain at Company like growth innovation mentioned have And recessions, we continue it one and through about making sure watch some and of product point I The end. leading think lot company, through. growth Howard keep invest enough thing - as lived we some daily think the by Sanjit, on have we mindset, that not apply you a in history, old to handle we sensibly a Howard we're been the very a in know time environment a cases I what means and is indicators. many focused a we is as And that we on close and marketing on to expenses sales continue weekly and in difficult

and come time, about path to of it's company. going this out need enduring But to in like continue building on the end is thing strong point market know a that our some environment certain to an and we at

Sanjit Singh

Understood.

Howard Wilson

being maybe of I a Yes. thing the thing one just And efficient. is would really - history that we add have think one I just capital

full-year. the basis, negative managing periods terms in cash in high had We've very of our look for we now full-year. of positive. If We positive for cash almost were being have X% around very On the carefully. flow were cash we very - the even full-year, been we managing flow quarters flow cash three successful at free a growth,

a us and as mantra that things that have we think approach, that I because state good the So economy. puts in unfold in

Operator

Davidson. next Jaluria from Rishi question Your D.A. comes with

open. is line Your

Rishi Jaluria

Howard, staying on much doing Hi, questions. my hoping And taking safe. I'll Jennifer, thank that and for colleagues my and well you so everyone is echo

Howard Wilson

Rishi. Thanks,

Rishi Jaluria

and hood tech that then want if revenue. to to et is X% than of reference comment hospitality, energy in under or but being Maybe Airbnb, companies of the tech And be lockdown or cities cetera? best start a be little can a might Howard under surface fact hood things [indiscernible] made expand companies like travel, bit are that the like Priceline social like think and are by OTAs, that the surface, on the like the kind on transport, if travel, you things are include consider that I on a going really but follow-up? like are we something with on that that think I've you customer ours got the Does again mode. something of impacted less you hospitality, of in distancing that. So

Howard Wilson

And a that Sure, I an comes classifications, Yeah. challenge you've think Rishi. thing. hit upon in. right, It's industry of interesting

travel that within functions. fall hospitality, about would those those folks groups, likes and the the squarely within and sort of types hotel we it's at look are those, of and line-- hospitality traditional, we when fairly travel of when more So airlines, talking

we've running, we are to we've the our that platform different likes forth, been they the ride-sharing of And perspective, model we're terms bucket. pull so trying the from within like that the do is granular out. sort a and to crossover doing fairly been the those trying scenarios have you what where of companies fall looking of type be of And at, in companies

Rishi Jaluria

Maybe could the how we XXX% range just then at next is for even going should talked see QX, quarter what which to beyond expansion to this And we own that number thinking solutions? some be I improvement the you XXX% to rate, execution? high of or then applied customers you're through we lapping quarter. about end that the net the number of stability thinking And saw onto this B a large off Thanks. there, A, expect the that the two about better sales their tick-up, fact possibility removed metric? is And to of in impact because PagerDuty guess relative

Howard Wilson

Yes.

Rishi. thanks, So

it set that next we some And feel view For now, prudent we not - stretch to what we like beyond to provide market, the given that be the uncertainty see next this well, would in current try quarter. expectations quarter. this for for would and around we've taken us the

Operator

Instructions] William next comes Your [Operator question from Blair. with Suri Bhavan

is open. line Your

Bhavan Suri

just having we're the I with step to conversations and to new, okay obviously wanted some I get be back I'd understand a let's guess you enterprises, going But might love times. through existing crazy say, large our we're have or anything out this right we we because do should or infrastructure, in had our of can't should coming have is dealing remote clearly something demands with now, and people. But it. in place place

point know of time. let's so and but some of fast sort let's again, us forward actually none fast forward, And when, in

the happen, interest, when demand that from with know, the tell us, conversations monitors for to system and going a the this saying, you alerts hey, you that customers are you potential or us customers at seeing saying, what look on I'd that, measure to of happening? all us, sort there of thinking it Like to are might all you but about color? is you're with love enterprises early? optimistic, too understand is just happening how still conversation a love what's about actually we're there? be Or sort large Obviously, a how it hearing what's

Jennifer Tejada

can will had the we went because find we the time, for this in thanks week. again, cost us with over this PagerDuty significant for invest we're We so cost looking - this, ways just just like past a more large think for had conversation very reduce savings customer other something PagerDuty conversation a And question. We to year.

it in of the broadly the organization across as we're a So that has deploy than environment. accelerate it looking to to we're and trying result past, more the been current

a deployed market purchase they is of past. point another data they're one distributed days. essentially, account capability in the though that that to us is that they've checked a and wild and a And self-served the is licenses, early we in is that in Now, home. that team And very with give fully navigational team example with done in used tens central recently recent I'll be out is the provides on even you company have their new in now a it

And - PagerDuty. so on they're putting that team bringing the

seen And up PagerDuty like can't use I said up, crisis lot this IT, new the in engine PagerDuty And speak DevOps we cases using organization conversation one I holding an are are a like kind to of the trials and outside of being is we've acquisitions and as there how also holding and environment. using is logo for around response. of

so PagerDuty then include management, leadership using crisis within underneath our and and our we product workstreams financial response four public team that governance customers, that, engaging crisis So are employees our and the team, and stability. system affairs,

that contact if on those can is across that SMS et right there the teams issues. to happening across drive the XX to of we cetera. right will happen It's quickly potential with immediate immediate that. not action for also All highly rotation see are needed reliable so we that the communication know think the information I we people more get to get And in such teams that do than platform. PagerDuty platforms, on PagerDuty those It's

world the because go the could today. I is thought than about it which early. way a everybody in is way yesterday, thought But about this have I encourage we think to different be different I The they don't We ball. would again, about is crystal just world the the balanced way

most that a how they on and managing we the XX responded. be home March calm pretty I've Xth is haven't I this in the is And of for gave that important notice work beat. we though thing expected highly and to them that think psychologically used And resilient, to proud difficult and hours really unpredictable our most team we're team think skipped I even individuals. from it's so been a is incidents really We to would that have big culture environment,

in way possible to position And Eric, But I we're our in zoom see for than other given hard hour culture for not it's not you, think the I and say zoom. might a just folks, after companies the the that's kids into that staring be Thank People better I this we us. making mean work. for machine are hour.

Bhavan Suri

expect with But either productivity and think measures, board you think No, early? stable else COVID still they one you appreciate those is obviously, ex guess do you guidance with are there's do have net rates. been pretty one retention on QX and Yes. first a terms dealt quick address given over those? volatility in the think And revolver, or everything I'm you potentially phone Do this Howard. you've place? we for net it and that. expansion go how Is inning, to rate you this kids I in think, The I Thank quarter the you the up? or of to again Do circumstances. given about feel well rolling or Where pretty and would comp assume everyone on rates the David we is done of you on back and the retention should sure especially out? Justice the you. else feels net And a enacted expansion getting everything do number zoom stable.

Jennifer Tejada

and customer the marketing as account-based been a crack just EMEA, disciplined I'll well alignment become and operational which really is finalizing he's enterprise investments think table, I His sure position take with is with Dave which can we some in as weeks. for add the team. our as success, self-service us to making in eight in bringing in. look have important making then marketing performed focusing that the on as as really at very organization. leadership jump on more well key been well we really strong to But has and also a leveraging priorities a to been fantastic Howard have super capability, that rigor

And of I - really - I'm team. I'm again, really proud our say, will just sales I

past And be able and positivity, people. a sales in this fortunate tone there lot a very ownership before of hit. you is products lot problems sense do to And a the were the in are the have just We the accountability kick-off of that market, hard COVID-XX year the the for right together is level right think of moment know to of for we in given right of looking that set really I but uncertainty. really we QX

are resilient out understand our executing well very just improving front and the continue continues to So on to messaging to secure to is in in current product focus what's easy to the be productivity market that we're circumstances. use, going marketing of very salespeople into equipped and on that that put we on us the very ensuring the easy and

Howard Wilson

just quick one comment. I And guess

rate that for being I we're to XXX the the mentioned for Rishi, As we QX of as providing sort see XXX QX. to zone

We view haven't any provided that beyond time. this at

Operator

Your Invest. ARK next comes from Wang question with James

line Your open. is

James Wang

to ultimate for the how of kind to of you achieve to kind You quoted Where target digital slice $XXX billion need what people for build view vision penetrate do is? your Could the management. addressed. think What that to fairly you build you many out? that's TAM? kind about right of as long-term maybe What talk TAM But products now focus a narrow PagerDuty operations R&D? that of I need

Jennifer Tejada

the for Thanks question. Sure.

we single of to multi-product we And of than mentioned a product points customers a As of for I more company it's took on board, One, to the de XX facto said them earlier, think brought I to XXX new product. year one our validate from a couple one the become work. things. this platform. continuing platform real-time of priorities our top that to That shift is

which the services. The digital intelligence, on-call cost the operations of capabilities, analytics, proactive context predictive you to machine and skews management truly and traditional which automation takes business really understand happening give to in help leveraging really what's then visibility stakeholders learning across you from really

a These of skew. that adopting are things digital people part are that as operations

think think out because most okay functional actually solution product in feel that making our entry also well that - most I I core there. really is we So reliable that and known it it's about the the we point is market. good And the the solution progress think we're and into actually

with infrastructure to what's serve companies, us effectively leverage others. are how more becomes also operates for intertwined as about to platforms and to - them, customers on of large looking think our that core and part interoperates more change, I and talking they And build are solution they're people to interesting is not ours very great looking it.

and announced was virtual dynamic From is, kind. directory, And do as a product something, you ownership the what's service no I of know of brings its It's up you're need also is where directory innovation services first need which do them. really send you may to of so mentioned the using the important it important perspective, them longer people virtualization, last into about a industry quickly those we spin architectures fall that. services you need when account who down element, to you really it services, people that

those opportunity is And users. other developers of ecosystem. the the to developer that's and one of the an things And for continue then in not build maybe going capabilities and invest those expose about we're well to to PagerDuty applications - known them on time, PagerDuty to top haven't all we created

really platform. future think be as to important the the so ecosystem well bring will community to power And of in the I dev the the

Operator

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

Stacey Finerman

you, hear something. did the And We you joining have of dropping, all some comments Thank for thank call might Operator. but today. us missed was some you

investor@pagerduty.com. so nice We reach Thank will call, day. follow will welcome look you are this able you to to a us much very have and post And at be you a to always to out transcript of along.

Operator

This conference concludes call. today's

You disconnect. now may

PagerDuty (PD) 18 Mar 202020 Q4 Earnings call transcript