PD - Earnings call transcript Q3 2021

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Operator

Good day everyone and welcome. Thank you for joining in.

While our attendees are piling in pretty quickly, just a quick technical announcement. [Operator Instructions] We're just about to go forward and in just a moment you'll hear from Head of PagerDuty's IR, Willa McManmon.

Willa McManmon

Good afternoon and thank you for joining us to discuss PagerDuty’s Third Quarter Fiscal 2021. call and Tejada, Financial Howard today’s Chief Chairperson Officer. on Officer; Executive Wilson, me are PagerDuty’s Jennifer and With our Chief known expressed results, performance, Statements statements achievements to uncertainties call this different or by may and from the materially involve statements. those that actual made and implied unknown our include cause be risks or on which forward-looking forward-looking

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

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

measures other the With example, the measures other turn and and which in evaluate Jennifer. in For measures measures financial may of GAAP comparison. non-GAAP and usefulness may financial our a could companies differently all non-GAAP use these or information filings financial A reconciliation on their are as of affect reduce factors make financial that tool release. the could we call with Further between over available our the performance, Commission. included for will earnings to Exchange company’s calculate is that, other I results Securities non-GAAP to

Jennifer Tejada

to and you, of me Thank Willa Thank who thanks all hear have Willa. Can us you you you, joined today. okay?

enterprises find new QX PagerDuty's strategic guidance consensus as were digital to our we platform. of to investments and proud -- a our large many operations well are and results returning in were we We normal as above seem

by -- strengthen momentum strong I'm for hope will in I we you from our confident as segments. mid-market XXX% extend and the continue help and and well our all Year-on-year led the throughout teams, Building enterprise and XX% throughout We of on improved momentum families, this revenue XXX%. this continued safe together quarter QX face personally are as grateful pandemic QX. families customers, retention our a was that the and are previous well. start, your net dollar-based to and

traffic, Our have growth and positively. acquisition free pipeline, paid customer web and including leading combined trended indicators

$X the an was with auto a management. guiding IT we This and deepens Rundeck closed PagerDuty's remediation globe ongoing and enterprise Our land investments creates well EMEA automation deliver new largest customer capabilities champion Rundeck well. we large million mandate who operations Asia-Pacific. new September distinct to expansion financial in including AI the addressable within XX,XXX utilizing total deal in customer. on competitive outside PagerDuty's with beyond rates, the in and experiences. their expanded investment. reinvigorated very companies exceeded in an teams our In employees, per the and and to capabilities ensure execution automation tech segments over rolling software expectations, outperformance teams response deal in plan Four quantifiable performed our services since our digital The transformation across a appointing include engineering on which reception customers both our This and automation including QX, retail to our expands to in out advanced verticals, included across strategic productivity, your the quarter. deals product plan, increased to largest value their America our in PagerDuty with accelerate Many great improved demand is of market of DevOps opportunity of resulted new with quarter launched with leadership, our in operations full use made cases third to growth and regions, digital teams and service revenue most and to go-to-market five October. North momentum expand this quarter DevOps multiple In return especially Salesforce we which leverages in to for world mode. mid-market acquisition the and in of rewarded and support as strong sales average products ownership. on customer close to captured of and us expanded significant above incident

continued We to shift infrastructure. to from as on automation essential as platform also operations excellent call progress digital embed in our made our PagerDuty customers

Our use accounted net innovators LegalZoom, We of Chanel, industry new and for year. XX% including Lego, ARR, last and including a maturity, MSCI. customers businesses. leaders Bell operations, Pearson, and Communications, quarters Corp., plan to DocuSign, Yahoo digital We saw our of with and their Vanguard nearly added PagerDuty increase Cred, their accelerate from operations up across significant Discovery performance three striking ongoing to Datadog, Japan, expansion

acceleration little and seamless than historical a now increasingly team's a operations of safety every saw digital life planned, were digital digital organization Yet they is perfect for case and new per predictable, and to million minute. increases events, way more in experience. $X.X can is Consumers online, went increase, the shift patience The and unplanned, convenience first appreciate unmanaged than have which less cost We for unstructured, responsible the also cross-functional. once structured, door. reality grappling is one with that the

realizing PagerDuty reducing their to and average yet ROI reliability customers. According maintaining up scale, with month also PagerDuty benefit customers of IDC for payback meaningfully. of annually customers' $X customers, event cost traffic, our year IDC, business XXX%. a solution to as critical operations [Indiscernible] traffic over the Our at the digital year-on-year, continued platform resilience under deliver progressing transformation. tailwinds while cloud in nearly million clients trust for is of to XXXX. imperatives This essentially Even are global PagerDuty, operationalizes the period, This to estimates three acceleration, to an for by and their two XXX% increase three our which is helping digitization the for our API for drives DevOps events are account from XX% Intelligence profound PagerDuty duty shift customers, of incidents. prevent has will GDP Event this strategic was in migration, into with our long-term a

across these digital Our imperatives. tackle platform empowers new customers geographies verticals and as operations they

One the PagerDuty on Australia's and multiple with banks billion automate for every digital where assets operations minute thousands of out PagerDuty of our potential to partnership them with over to critical. teams $XXX in across multi-year insights is rolling in incidents largest downtime provides real-time is of respond users proactively plan. with rich a

million reduce productivity deployment projected and leverages proactively platform the alerts Our and their AI teams, annually. DevOps, times of ICS, saving incidents, a $X.X increasing to for resolution while

customer real-time thousands the provider reminder, new to the mark generated investment of MSCI and improving to of in-house by of PagerDuty tools scale global still decision by PagerDuty manual most for PagerDuty lands action, reducing MSCI antiquated number ticketing the cannot systems automation. many tickets are decreasing address embraced an business-critical their the with users up on and over customers, XX%. Like They their of DevOps user a our incidents monthly, reduce will require many XX%, with help insights, MSCI leading projected X,XXX replace reduce their are where of in our processes reliance and Greenfield, nascent workflow issues our availability, which their community a customer-facing ServiceNow that tickets undergoing is support of transformation. a early transformation. DevOps market, As companies executive-led automation.

customer serving for also cases, our Rundeck's and language adopted We customer runbook provider doctors use service interpreters through as pivoted grow response and automation. service COVID. with a new PagerDuty that new SecOps they within teams in patients connects particularly to Globo, and service and solution

office, the in dissatisfaction increasing for customer at a in used This telemedicine. Before Globo with demand but incidence was doctor's platform. saw video spike and their resulted

support engineering to teams. turn between workflows customer they So, and improve PagerDuty to drastically

than Event reducing PagerDuty's new XX%. and Intelligence teams has to and building on escalation, focus by out allowing disruptions Additionally, while enabled products services, automated scaling more

experience Now, service patients recommendations, resolves doctors and a insights, September, we learning resulting dependency insights. machine Globo management capabilities issues, proactively growth, in great pipeline strong summit in including and providing unveiled At a new based uninterrupted. change for

have the and accelerated is they digital reality multiple most data that infrastructure clouds. digital our centers, assets While customers public of span and private and have transformation, their

provider simplifying across actioning solution from only enabling prevention incident insights capturing environments, work. consolidating the data, automating and intelligently and are and these complex We by

we achieved who over platform. we at cloud, the hybrid, position on-prem like customers' of with which leadership us was support industries the our QX partners many and and ecosystem. multiply quarter ecosystem Along Freshworks, record Symphony our We PagerDuty's with our and force our presence one quarter, a our integrations, Rundeck, center partnerships. implementing XXX of Cloudflare, cemented verticals, ecosystems are sell welcome core partner Services, helping by Consultancy integrators channel in This PagerDuty. through top Puppet, joint with partners built new apps we the expanded for They're developing global to systems growing also to as Tata through campaigns. of selling, world, beyond partner were

released last new continue their to on-prem integrations our the Guru. workflow, and partnerships on hybrid, markets also providers, partner as quarter, tower our customers this extend channels. their including PagerDuty help with this and the the These AWS to and week's for we We reach new expand a automating help cloud, AWS outputs PagerDuty cloud outpost cloud marketplace the and in AWS integrations years, comprehensively migration leverages few DevOps and DevOps Amazon to environments. validate launch been journeys. available enabling for announcement Guru, has from to relationships manage Not platform over and customers only our to control

programs September, that other sourced what rather accountable During seeking imply to effort sustainable annual improve to ourselves share at the hold equality an and and first put In have have in all we with to programs our we learned we not PagerDuty. quarter, the open answers, diversity place. to companies report, in we advanced representation

boards. we to to the Dr. partner of as challenge, directors on representation Directors. of week, Board We enlisted a appointment movement of a of corporate PagerDuty's Alec the Gallimore founding This improve board U.S. the black also announced

And beyond I Engineering we match alerting million announced optimistic a software for PagerDuty.org, more TAM the has new call opening grants our confident voter our at operations. are and thrilled incredibly continue additive AI important and our I inflection incident in to a As over I committed $X.X of leadership offering, growing deepening new who well new future and cases, Overall, unique leadership up Dean differentiates was to trust the innovation giving. bench, bar, our Alec position quarter engagement, of QX are and importantly, Through employee and to on digital and the in our with to energized by and to us. the response. inclusive am our healthcare, confidence broadly to engineering am use and users, critical headed expanded automation and ops, I support where building team J. diverse, leadership customers, a enhanced has culture on our to and automation on ahead on am have and and PagerDuty opportunity point. problems, focus both confident in to our us. welcome bright most great solving Howard, Robert University of while market team, the in being view that Vlasic, Michigan, huge important customer resilient you. while where our we over raising innovative, and grateful an our time him.

Howard Wilson

you, business year-over-year in of the with above $XX momentum our to and guide. revenue XX% of in Thank We end strong QX in coming the in saw Jennifer. million high market growth our

driven year-over-year business XX% international strong robust expansion. revenue was Our by of with growth

in was million of scale increasing XX% negative also operating of negative XX% XX% were free the the and above along lift digital negative noticed where by gross non-GAAP enterprise COVID-related in above strength of of our streamline DevOps delivered in came We helped churn positive of in saw customers, our we their contraction business. flow rates, in improved Beginning $X.XX margin net the and projects net down This as $X back XXX%. Rundeck several acquisition retention PagerDuty dollar-based the quarter guidance markedly at We quarter, to flow shift we and quarter-on-quarter at dollar-based our to customers early target economies positive with XX% where customer double per EPS sequentially we with QX, cash transformation. in Non-GAAP million. expansion, in margin XXX%, range large operating versus despite $X our retention Non-GAAP saw and initiatives as we QX, improved ahead at our third our to share. saw prior amongst year, we particular cash increased strategic XX%. support

to and In churn size one-third pre-COVID addition, consecutive over significantly, levels. customers quarter approximately of us. enterprise and seventh expanded improved quarter, our returning the contraction Average during with deal

Our new by free offering than number both free, year. the grew of XX% companies of more paid our well-received and has by been and from benefiting platform,

acceleration, than DevOps ago, tailwind the year-over-year leading growth some of in The we real-time XX%. Robust is of with term and month-to-month billings of more the coming is quarterly which XX% of spending on because performance and it continue through contracts, of million versus Customers over XX% expenses revenue, the trailing obligations sticky continues contracts ago, the XX our $XX importance QX indicators year million growth distributes high proportion have XX%; prior all our support expansion platform to operating year. XX% compared with expand the grew a value growing to business of an were why model Our of XX% growth and remaining customers multi-year versus prior investing of in quarter the Non-GAAP to expenses the in of The versus shift the $XX about renewal cloud and to work, marketing mix digital a Non-GAAP efficiencies. compared year customers large advantage. but us growth XX%, business transformation. Non-GAAP were enterprise discussed consistently and sustainable the continue mission-critical year, have period or year-over-year year from to of XX%, rate a to term ending expenses customers product of increasing, predictable place compared landed million with to as a revenue we'll XX% we competitive on last expansion past. our more a strong contracts customers adoption, innovation research months increase sales invest and and in revenue prior leveraging demonstrating development XX% million $XXX,XXX the million XX% over to in were $XX $XX operating increase and year. XX% $XX and on revenue compared same differentiation in We year. a XX% $XXX,XXX

expenses to balance Non-GAAP to compared the growth continue the or market. as of in topline XX% the investment $XX prior for revenue year. and million were here administrative signals and with We in quarter demand the XX% general

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

Our loss to of of ongoing loss improved of to COVID to million, and net of operating $X $X negative part scale share as net spend non-GAAP reduced spend per was million, the net QX QX compared on travel up loss quarter This in versus loss negative last our efficiently. per in a XX% initiatives Non-GAAP in share $X.XX of to year. shift margin $X.XX well third in non-GAAP due XXXX. XX% because program a in was net of as

free of XXX% million. $X the fiscal we balance about reported by fiscal cash $X million QX increased positive quarter, million quarter to $X same well which the the $XXX of in third improved Turning compared sheet, a we in business in of equivalents, X%, in demonstrates flow and of XXXX a $X X% quarter cash with to of the cash to operating as last and with million XXXX QX ended cash quarter the We year, investments. in model flow in Free above million our flow the third efficiency scale. of cash, leverage margin

still our cash first operating we the in be For ability investing flow, time and operating we're cash about year, the expect full flow positive generate excited positive for to innovation. to while

enthusiasm and mentioned, around of the up As from more so see cross-sell TAM powerful expect track is can by through self-remediation. this and our to acquisition the brings. and and completed racing customers we on this With even bring to platform our by automation we expanded we're plan Jennifer combination enhanced Rundeck for integration quarter, that demand fired for the to our opportunities Rundeck, ample within the we new increased customers value it overwhelming

fiscal raising in markets, momentum our third our we signals the and the in guidance. demand fourth in Given are stronger the quarter quarter, and team, confidence pipeline XXXX

per million. to range the revenue outstanding XXXX. of expect of XX% with approximately of the million, expected $X.XX loss margin the a $X.XX, XX is to $XX rate growth share adjustments the representing between fourth shares in and net an million implies XX%. of $XX fiscal range loss be range to associated We Non-GAAP XX% XX% quarter with of This the in to This this Rundeck incorporates acquisition basic operating past of expense in quarter. versus

net the million. $X.XX midpoint represents of an XX%. of per million in For the outstanding expect XX% year XX range full which Non-GAAP margin loss at million, growth operating $XXX of to fiscal is rate. we XXXX, to This with $X.XX approximately $XXX expected the revenue of share basic to loss shares a implies be

their I have drive are DevOps our Jennifer's to me at comments platform to success turn business. digital PagerDuty's not complexity, productivity, unique reiterate and transformation, customers. momentum. acceleration, to pre-COVID that Before business nice ensuring They're these [ph], critical critical reducing improving on Q&A, and our migration tailwinds for the unplanned managing imperatives of work, let the are returning digital center the cloud and topline tailwind plays are to a outcomes. role

that are accelerate will see business open in We we we up that, coming confident our year. our continue the as tailwinds will to I Q&A. drive call growth the With these

Operator

to our to just with we Fishbein a you unmute. we're much, We're here. looks up going Thank go I'll Instructions] do from It through Q&A going open Joel? Joel for to Howard. need an analysts you so [Operator Truist. first and like order to Joel, have

Joel Fishbein

unmute. I'm Sorry,

Operator

you. go. Thank you There

Joel Fishbein

you. start Jennifer, I'm Hey, congrats going the great on I'll results. -- to with

-- to be scale your coming hear do upbeat in are top think I voice, it would here? from well. you priorities can voice what Howard's PagerDuty hear quarter, can COVID, out this You're in report your you very, I very What it as of

Jennifer Tejada

to and see Joel. a it's That's nice you, great question

deliver continue our we for one; to innovation think customers. have I to

moat I are on-call. plan. other have, think that We that adoption really our widened operations of digital focused can you in on see platform the competitors And between the

bring background AI continuing around to experiment need that in I our was combination reach. the market year-over-year, room out really go use particularly the to developers us mentioned cases going to excited of but is grew brand, still strong million We've XX% towards freemium around such on to sort freemium the expanding this us. gross our early I it's new it's we really really and them innovation, see with to to XX over serve given paid important an is to plan, such margins, So, be IT Ops, get to automation because accounts and We have as build our with of and effort free that it's such got there. our find them platform. and personnel

growth having API very XX% we to and outcomes. growth spending traffic continued continue scale platform who platform, continue more this to our our to more nothing end build our market customers to think help when every important, say acquisition always incidents So, at call, to operate events the I in count those even quarter, significantly operational and And well. in high people to what have will is in very scale very, XXX% if and the on we shown saw this and and we are as than we else, produce that important. us lastly, do, more customers and shown very increased marketing it's incidents, I more COVID's time resilient be and But with us then understand work brand us

Joel Fishbein

Great.

result one follow-up. struggling e-commerce an as companies their inbounds seen of Cyber some perspective? they as this just with curious quick and Monday, IT week, serving uptick up had of this an if time difficult of as to you've late was from I had very challenges apparently, customers their keep some that a e-commerce in a In Just these lot some of companies

Jennifer Tejada

us This did for is why a branding quarter precisely retail. is and in reasonably have so important we strong

have just I really to ported retail going up then you've as for many a to And into would e-commerce we surface to continue cloud say believe momentum now cloud continue important to a for acceleration, journey see digital scratching that migration, grow, hardening we're I segment digital think I relates now tailwinds, they really a still is of and businesses seeing to customers particularly us. in which to the environment; figure very my customers, out comments, adoption the continues operations their think that in how is operate mentioned of and will it that transformation, and in everybody's why supporting successfully. that this, DevOps that we're which and behind sort them seen to our long-term it's our which I early. be

Joel Fishbein

Thank so you Great. much.

Jennifer Tejada

you. Thank

Operator

go Thank we'll you, Joel. And to Kingsley next with Crane Berenberg.

Kingsley Crane

the questions. Hi, on my congrats taking quarter. for Thanks

companies you traction any the Symphony, most that with areas have one you be a number Cloudflare, the of ecosystem partner excellent seeing are most? First integrations, surprised would the Freshworks. traction that or you particular

Jennifer Tejada

provide, getting the team of gets big lots the new and you work, areas, opportunity. either of the that work at going a and to is always us they our think look them see automate ecosystem think, be, resolved, see we Some sort those right integration to analytics when generally is distributed see a can use those is platform a loop, market trying workflows PagerDuty you services lot to unplanned you in customer of cases partners closing that that are helps real-time and detection or of so service, help the discovering on I that where of continues loop automate start areas. unstructured partner PagerDuty what sure they're you'll the it and interest which where of think the the also enable. making more close to Automation the see a I in that seen But security as we've why to about investing

and PagerDuty. I partners continue as trend. to see on more think building I'm more see to excited so a that we'll And really

Kingsley Crane

improving just it best-in-class it segment, hear anything quick really recognizing that that the encouraging. Opsgenie? In against competitors, customers are is this encouraging be follow-up enterprises. really one ROI? rates the are you And to are these then really strengths Is in Or new? would like when largest That's hearing the

Jennifer Tejada

Well, are I'll Greenfield, we're behaviors, One, a or et of me new remind spreadsheets, our cetera. so of of lands manual replacing things. most couple often

So, now again, working now a digital. lot customers their their accelerate DevOps still are remotely, of businesses their because to teams transformation, are early, starting and are

and also than of I We users enterprise from now, much in XX% see think, our enterprise more don't competition are [Indiscernible] others users.

new from but devs IT teams, and shift to and the across mature that's to of are traction their in that's is itself. or that often also teams, data, more it's some see really we're of seeing have big over do over digital into been that on a interest PagerDuty over So, that bring incidents organization. and to an to new decade area which our But we as AI I manifest for workflows, think, solutions last operations not big large last a They the that's three these to enterprises, teams. data put leverage starting that that responders, tell their and and more focus been gain the And then events, the maybe the and leverage themselves lot strategic and of customer a starting I started service starting of security, you differentiator talked year part increasingly a add products two, on a with it. two services, first years. to nice about see market we think that would you has of the I just out

Kingsley Crane

Okay, perfect.

Howard Wilson

seen that Jen, in is the us. with was of third remarkably back having of just to another But I thing terms good to expand see. And again, add which type always pre-COVID quarter and getting Kingsley, have that companies would we've a this to of where expand saw consistent And customers sort enterprise with them, is our one activity. mid-market think we I been roughly we us,

for mid-market enterprise, sorts helping associated things a the be to the happening. segment. our of projects proving are that's of that like mentioned, those certainly And And back tailwind on kind revenue with are migration, XX% from Jen of cloud coming So, sustain table DevOps transformation that the the that's us. projects that and or

Kingsley Crane

Awesome. again. Congrats Thanks, guys.

Jennifer Tejada

Thank you.

Howard Wilson

Kingsley. Thanks

Operator

next, Credit Thank the you. McDonald have you [Operator Rhys, Rhys hand from Instructions] raised Suisse.

Rhys McDonald

congratulations horizon, some Jen, Great. taking on changed strong Thanks a questions quarter. think we website the solutions include noticed your September, page from of of landing think after marketing? by a your as of summit for or and there Or from a industry. the a the Should to changes in are How more either those about I packaging we perspective, perspective? changes of on that? go-to-market broader should form targeted

Jennifer Tejada

to where many really have learnings and to working And that for really strong to a consumer perspective. in important be other It's kick-off two and we what's very source it's internet, up differentiator case services some use the places business verticalized financial customers Well, what happens that, ways a PagerDuty. makes PagerDuty, marketing be to website. XX on us. for very the stories marketing think seeing their their to I you different be I haven't of deploy, that big But has some performing of things so cetera. that's in for One, noticing is easy to where more five teams, easy and so their digitizing add the my helping customers are can paying a had of I PagerDuty sense. from can We our some appreciate customer we the becoming team faster, tech happened. open looking apps. share to and you are to start, category someone's there I lot really natural understand thrilled product start we've e-commerce, past attention do that the minutes et a will I about this to to you of lot running that talk see willing hear industries faster of been and retail, But actually strength the use, verticals can know certain a want of vertical apply sort to also, tend on to moving so move definitely them digital do a think speak, what really these in And and talked or about part and I more think we

years doesn't heard verticalized research I the I or our getting licensing our are leveraging new ROI But and an So, an package of PagerDuty talk of and month organization, that tired to championing of a And you're seeing, how growing to over in really tell customer customers four it is think to is SaaS importantly, solution two us and return payback the enterprise me fees ROI. like helpful. really the of today, product. we increasingly, three able you being about the to wait kinds quantify about IDC are ROI customers having have multi-year large that your to require think pay someone out if XXX%. huge to will get a on kind talk I you And word with

Rhys McDonald

there rate could in overlap, to comment in a quarter there Could how whether It could many of one that and extent sense the you was the the on a from maybe Howard, And could on of ads around makes your I or I expansion you color. your this came contribution quarter? not customer for comment acquisition. if appreciate housecleaning, I ton if bit And of just the ARR you Rundeck? was significant little

Howard Wilson

thanks, Rhys. So,

in obviously, acquisition So, October, we the Rundeck closed right.

was its to So, really relatively small the quarter material. not and contribution

small customers company. base, customer have along, that share it's an details they around, In a brought terms we relatively did they of the early

about a And that a piece I'm how impact about ARR executive positive sort our of So, have it's delivered customers' as most with a there's logical certainly loop Rundeck They having they to an again, contribution ARR, is the certainly number overall sponsor, that when positive think with but specifically. we one from excited going by PagerDuty really discussions feel ads. not accounts combination I'm and been it. disclose to -- part don't But positive such remediate I where I is the family. a help this to that a of have there actually close detect of material them

Rhys McDonald

taking the appreciate I again Thanks for sense. questions. Makes it.

Howard Wilson

Rhys. you, Thank

Operator

Great, thank you, Rhys.

Sterling? to like Auty to Sterling JPMorgan. we'd Next go from

Sterling Auty

a how you put just fourth Rundeck because Howard, didn't revenue it, acquisition, fine want what point quite expect catch on to thanks. that the Yes, maybe the and people would the understand guidance? in guys. of terms contribution impacted be it in would follow-up quarter Hi, I to

Howard Wilson

about of Yes, an be. say revenue in annual the basis so have kind acquisition see would we the doing of deferred within the we What on as the that's a balance we time $X.X that. what saw from you would haven't specific we million did to Rundeck. the of so of contribution Rundeck of at revenue provided across a on we terms high think extent have And breakdown that that came revenue I company that being opening which when talk; can the spoken disclose this single-digits, you'll

Sterling Auty

guidance just want right. the All up that organically Rundeck? is about there next was for guided Or you've quarter, where sure some I to then added would think make if say you so organically you and --

Howard Wilson

of addition of combination Rundeck. and was as PagerDuty was It the It quality a the combination. improved of a

Sterling Auty

helpful. behind you, last right, All retention are for very the one say dollar you? comment of headwinds acceleration? I And I lead you the And from to net the that's sneak then perfect. one enterprise, SMB if Would to going customers in now the XX% given about Jennifer increase being think in that's the could that

Jennifer Tejada

users XX% enterprise, think I so come wanted-- we won from of our just

Howard Wilson

our of revenue. XX%

Jennifer Tejada

XXX%. our I revenue, is retention me with I Howard strength our bring to But point base XX% thing over sorry, net want to good everywhere. enterprise its the in enterprise dollar up of expansion;

are strength definitely we in expansion. that So, seeing

Sterling Auty

you. Thank Great.

Operator

Okay, organization have of that I'm your sorry, don't from let Stotler. next, could Matt, don't those where Matt from? up know; know if us have you're calling we a I you hand

Matt Stotler

Obviously, some, William time? maybe response. still to some you But business Stotler, be have thoughts you customers these specific guys operations, your Howard. I guess start-off, early guess including recently, from service, we'd innings. get Matt the taking over think Jenny love case Hey, some you Blair. first on question. Thank highlighted cloud how interest for I customer meaningful these Yeah. relatively your are early to solutions could of and use

Jennifer Tejada

earlier, question. mentioned and for Matt, the Well, you as I thank

really for our We that don't But customers problems solutions yet. excited customers, are products new have they from some us hearing these and come been they from all are how have receiving services. about of

and think mentioned, uptake that So, about we something the providers, new been already cetera. becomes more ticketing out et that to everything don't you us that's And industry, unless there's how systems, think that to kaleidoscope the of I would it's demand it way. talked are I reasonable these leverage you tell as this clear different last and we about in has build different build you the cases, their market, customers exceeded the in expectations. because how start hard for year solutions signaling in customers us can these our of out we've much when there often a explain to use observability we're monitoring

and and terms starting that's at for more case incidents around to technology because of and the effectively popping that and what the and the by the matters, within the don't and and COVID, within diagnosis workflow we issues with that learning those do driven and understanding across home, right living team some get self-healing problems seeing automating just some to also you in think are issue, use but or to around from working right that and up expansion. of things business, plan safe the of an with not we're orchestrating Rundeck, team dev auto all has remediation concept time, really just not drive is the where helped awareness time point automating more that issue in detecting that more really everybody I create to

Matt Stotler

you think early talk mechanisms around customers? the Can customers, has free of you pricing about like you in the those you Right. making to new Right, converting commentary looking get to have a about any paying structure obviously or then into model, the freemium those been start how kind place that some freemium quick sounds that's those, forward positive. kind of users And response follow-up, just helpful.

Jennifer Tejada

so go-to-market motion. lucky a we Yes, have we're hybrid that

hearing use well product-led users the to product of easy for so growth are features. work my it and sick helps functionality so but more and with So, teams and and customers to starts that more discover that us me be talk so about has this,

way and the customers improve performing is integrations to strategic sample support product transform. things should particularly a kind to that really noticed they the or where on transformative one the commercial but allow they teams do, user where more so experiences happening can last And that on expand automated way them performance really more where things where annoy customer I a work, the initiatives is need own cases. that are what work, a use how to that digital to really organization, of customers to trying strategic are just focused through has with customers in do in lot trying quarter, with their change And are help to then starting our can really focused environment. to now us obviously, adding primarily finding platform customers and intended a equally trying understand new XXX in freemium who's like their with are identify to was our the even efforts well conversations their our team, mid-market more think, past, And in future the which of having really sales our really to -- everything they around to not large of enterprise been enterprise we operational including mid-market product but we fine, they're accelerate the have, teams support these that are they're than the it

Howard Wilson

I add this it's seen look days to plan, early conversion when good And Jen, just maybe so -- that, but still we've can at with free really for us we the rates far.

better heard the they've we we than but in what been disclose better them, -- reported have haven't industry. don’t We and than expected

strong. So, it's looking

Matt Stotler

again. Thanks Great.

Operator

Thank you.

Next, Singh please Sanjit, like from go hear from Sanjit to ahead. Morgan Stanley. we'd

Keith Weiss

Thank actually for for in Keith Excellent. the noticed. you sitting Sanjit taking question. didn't if Weiss was you This

Jennifer Tejada

Sanjit looks looks different. only Not does different, Keith but

Keith Weiss

what dressed for I I Wilson Halloween. know actually up You as Howard

that digital impacting what how's of to to plan? of talk of really if that that Can year-on-year want I net you about to a little uptake nice that us from kind you in the operations of ACV So, amount about the plan, terms saw you landings, coming guys initial new these sizes, will, ask uptake your deal customers? bit new with does good

Jennifer Tejada

you to take Howard, that? want

Howard Wilson

Yes, sure.

business our one or plan. Keith our there often of I our One a other couple they for still think of So, in customers; that on could are our is plants, that one. things land like professional in

is in a part capabilities as see includes and as land moat do our digital those It and natural What upgrade that plants the is our and they though migration of functionality and operations any digital the customers exciting mature. operations between apart we the then sets competition. sometimes So, really us plan what advanced other widens us of most that's players. from to

predictive, allows machine that to they proactive companies faster. problems to in allow learning to it be it how to and much leverage gives manage solve advantage able more So, their them to features more be take of environments, of them terms

get dependencies service them and Our recommendations the environment. in a to is in ability change help within really on of that powerful, engine view terms what's happening

special isn't and All driving think growth the else and in so and operations unique I of anything that's plan are like those us. interest there features digital the because

Howard Wilson

a our and product the simple, the to of on customers a in proposition, payload moving wants or to new is land, relatively is a initiative. of it's most land developer usually cloud of service, still a part that And manage terms transformation still or and

is the the come product through a of Rundeck One through motion, new things you land a about come PagerDuty don't can the Rundeck. gives secondary us in you nice in acquisition have it and only, to

use keeping And opportunity new as and new even about and product land well. as easy technology you'll add we product. the focus of understand, features excited easy to continue to to on we're that to us see the lots So,

in where we've and we've are transformation. shift you'll in from that supported leverage needs seen also in really hear of reactive think data starting how done us quarter, quickly we've the it but customer quarter-after-quarter-after-quarter. really of this customers some expanding it both know the to names repeat the some we how can the I really the strategic -- that deals a appreciate them larger And caught you'll and And are see on proactive. customers same our being that's platform to

Keith Weiss

down on traction good seeing uptake are drilling Got product, Got the specifically that how's then it. that Event it. that? Intelligence And going, with you

Jennifer Tejada

that let speak I’ll I to Yes, Howard specifically. so. think

Howard Wilson

our and and part wanting add up to as able array applications of Intelligence our digital better uptake good continuing been an plan Event plan with in by on, plan see again, as operations environment, Yes, so able or around to we're get some also noise, of called reduce largely momentum customers being this is their and of in our included that's it there. of to be the monitoring The attraction that take to have Event to because business all Intelligence Intelligence Event Jen kaleidoscope monitoring huge driven customers people a problem tools has the faster a to and them. professional

what filter in get Event on And that down is the so enables. problem or that's to and critical Intelligence able to noise really the be and to that right person getting right

product. So, we're momentum seeing that good with

Keith Weiss

talked last We so sort in use I if PagerDuty, for the of broader been IT then use sort any with on the back potential fashion And traction one. have update core when of one about Any the operations update incremental it. you of guys terms sneak cases of case? Got way just can kind outside seeing of the it?

Howard Wilson

customer type the we qualitatively, environments, momentum you the I like. and have and customer creating in so -- continue to service mean, environments which good us the lead SecOps see Yes, to growth security service if we good in SKU

on figures We reporting Analyst diagnostic haven't it season, within this any but we for an actually give that Day. We people can save on particular got we'll that.

Keith Weiss

very little you a good That's teaser. guys. much, Thank

Jennifer Tejada

you. Thank

Operator

we And Markets. Hedberg with RBC fun Matt, Matthew you Matt to Capital next Thanks go there. the to for want

Matthew Hedberg

confidence hearing even and but for of just better also you the to while, of could perhaps about great if been about better Dave's because can buying, it's like there contributions obviously, just thus questions. on in talk COVID control environment, a thanks you far. Jen, seems guys, execute me And like, to cases combination well. me feels has point continue to a you inflection taking it higher hear. execution. for on what my really curious to specifics aspects, seems almost momentum know but ability feel an as you talk versus about could is both It the better sort Dave your I'm I Hi you spike, like now

Jennifer Tejada

absolutely right. Sure. that's Well,

of ROI, some up-levelled in is rigorous [Indiscernible], customer our managing he to and are service. would finally, he are helping but focus so what understand lines before, whatever talks Even up environment, well, levelling some I of for sales cases as for it both customers what it go-to-market hand really our supported think XXX%, we obviously have the to leadership then really quantifiable sounds and that are means of dialed-in that, have hired delivering And also with macro assessment. they our airlines day say, that diversity this and who understand really little empathy, very we and all sales in We cruise talent success, to that prioritizing our has Dave benefactors. that only what accuracy often here customers go customers of think across companies comes. all still Dave you about. and on them the entire who and prepared up are And not a differently. being customers are important can't experiencing led has including teams, the have how brought value to And through really boring, and COVID value care team, base; we it like of be I and sort assessment. we folks operations the often our he's business business our a look to at really was in have that spike teams really day XXX% about trying our just this, customer a our hygiene back we improved. are forecast on to are of really then our prioritizing team business the I when And customers going and customers, at on of of a we predict value look of are we build Dave, better the And because COVID as result being And and I

organization, revenue, to lot And our I the our fatigued environment, offering, are And I'm really and by digital so being grit shutdowns in organization really by the are grow go. able if better collaborate to Those the that that. with the a I it's cetera. at in reduce us more expand innovation sort lying go when PagerDuty and and of received was cost in teams equally putting their our important you'd their mean our this the customers of a understand think how one didn't really say, people work be in going about teams a into I and balance to customers not customers continued office contradiction teams by hard with think and trying be help of you would pleased is to And both. et product time, been they're you say where their summit at pace But position of that two efficient. things can helps in, you that same delivered to grind show and with forward. become conflict lot our really another. our for and

focusing they're we're having but confident conversations kinds opportunities seeing some normal pipeline of I'm more our on settling as lot what customers just transformative like and in with of a also of those am the their new I own and how in strategic sort well. into So, execution, in

Matthew Hedberg

call, August? data did, And -- really to what prepared if a if that close the I out wasn't maybe if hear. customer certainly that know you of shine you sort ever didn't, point. a deals in you be-- on case. quite you use could you bit there's light you don't maybe it’s in scope last little because the on magnitude more guess And your might or particular call, way really, a that one your on great any of of certain addressed on is in if maybe then the did hit it great That I enterprise I to XQ remarks, You largest deal

Jennifer Tejada

out spending number a What I over customers see strong really reasonably that's customers in us kind referring was a digital are large is over had seeing, digital $XXX,XXX significant and think and changing, XX% an suburban the urban of suburban to around XX%. dollars market lot out business, I a a a with moving houses that us grew I good of areas already deal areas. excited people yards that is land of the say grew a with out buying but on of really was million their in in or into by lifestyles would you're and all and an with that example now by large spending or and opportunity -- the of organization to of getting with are mortgage is particular a of getting second provider quarter, houses That

incidents their can and that experience, they right, that shift -- focused across to little I we talked acceleration. Salesforce get and business. about quickly, And customers that excited issues impact to operationally. and to And business, manage become have, their on the digital see continue really them a before just making about so similar teams a for support that which and operations in out rolling across the that right, operations The more really particular sure plan really to customer we the faster all business link, look that could multi-year is want and it proactive customer, the PagerDuty being was like bit again, agreement to was Salesforce their ensure digital transforming about relationship help

Matthew Hedberg

Super guys. Congrats, helpful.

Jennifer Tejada

you. Thank

Operator

Rudoff do raise feel hand We D.A. inquiries. so ahead. hand you. free other Thank any have Hannah to up have go one Davidson. Hannah, far; please if you your more with

Hannah Rudoff

this to Hi, solid great today. It's all. for Thanks questions see taking Yeah. business momentum the quarter. my

was could American pipeline First how has been following Virtual about North you And question, it's EMEA build how a conversion Summit; since pipeline Summit the I summit was? been? your few following wondering months if then talk your

Jennifer Tejada

summit came products in and that customers Summit, pleased meant Sure, services. both also global on summits pipeline lot the about also fact, European because we the with of had our we're EMEA more had but a I virtual, those was to of September new joined off our that in learn and back of think

become top is on in talk that we about telecommunications gone that to leadership particular, this is in and to we're transformation. continued So, general, company. interest and their we're organization across seeing that particular for them -- tech interest excited across reducing massive agile around actually large getting to really product toil platform become is me we're the support product seeing like the like a in move about. to case And next radar. One just through Rundeck talking automation, them about has transformations. humans the the set, of we a in Europe PagerDuty PagerDuty agile their that's week, looking via their time where is And And work to joining saying down suddenly, mission-driven a how really and of are Europe' non-technical, care camera, quite of a agile, frequently with my more bit but a supported have that about purposeful, they the I'm a CEO have forward customers business transformation. some to customers in driving use spending 'in

Hannah Rudoff

And there then much Great, integration to what's of for do? that? good left And is it's to really the how hear. timeline on kind Rundeck,

Jennifer Tejada

give and integration our sure quickly operate couldn't office, distribution to did week integrate out innovate in the folks really our the product, benefit it the executed we've helped like also is a during of well well. environment. to and startup continue to that and lot Rundeck and is, done have quarter and first team trying finance get was and since very Yes, quickly real we prepare that we deal we company environment I have their not earnings build of public helped say closed to enough a even well, that to the the been acquisitions get this only make a where Rundeck. we to actually the out for but their that get would continue see on an still thing And room first going We're

it's And tracking so well. not -- it's very

Hannah Rudoff

Great. Thank you.

Operator

audience like looks final you today group we up. that our provide an questions the opportunity any like our comments give folks, to from wrap Jennifer, all to have both today. that's we it I'd Howard, to before Well,

Jennifer Tejada

given journey as going you, analysts, a understand we we people wanted just we've where especially feedback, help many our to tighten up of to for we're to how to and lot of I say us which try asked have really company. and you thank a and how our continue appreciate

so are to really customers. So, our much that thank see to you and on and next the time to earning the continue put we us in for safe Thank of hope you and to focus well until I that all remain you. day. your keep and of every going And appreciate all you. that We trust continue masks you on

Operator

and presentation presentation. call the Thank Well, for that today. for concludes PagerDuty you our attending earnings

will of closing Enjoy the the We be session rest shortly. your day.

Jennifer Tejada

Thanks Josh.

Operator

Happy to help.

PagerDuty (PD) 4 Dec 202021 Q3 Earnings call transcript