PD - Earnings call transcript Q1 2023

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Christine Cloonan

Good afternoon and thank you for joining us to discuss PagerDuty’s First Quarter Fiscal Year 2023 Results. With me on today’s call are Jennifer Tejada, PagerDuty’s Chairperson and Chief Executive Officer and Howard Wilson, our Chief Financial Officer.

Before we begin, let me remind everyone that statements made on this call include forward-looking statements based on the environment as we currently see it, which involve known and unknown risks and uncertainties that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. These forward-looking statements include our growth prospects and future revenue, among others and represent our management’s beliefs and assumptions only as of the date such statements are made and we undertake no obligation to update these. And during today’s call, we will discuss non-GAAP financial measures, which are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. and measures GAAP our available between release. earnings reconciliation non-GAAP is financial in A these factors we and the on information Further other results Securities Exchange included the company’s that are in with filings make and Commission. financial affect could call turn I Jennifer. to the that, over With will

Jennifer Tejada

Thank Christine. you,

Our strong of and ‘XX our our consecutive quarter results QX over momentum year. XX%. fiscal FY last FY QX XX%, grew in ‘XX growth Revenue an extended from acceleration from fourth

operating for margin is year-on-year increasing as year with basis towards we Our FY over operating points improving scale, as our leverage XXX goal the ‘XX. progress we of profitability full

tailwinds, digital long-term transformation worldwide. and DevOps are top Our cloud for organizations acceleration, priorities adoption

a capture continue from TAM demand productivity. We large companies strive as to for and efficiency

full to I year outcomes measurable laser-focused guidance ranges. and our thank our on or to bottom world raising line measurable execute and we’re who want top customer continue around result, teams the remain success a customer As well.

to and is always, success. driven recognize success As our by our placed want partners. their in and customers I their PagerDuty, trust They

incredibly customers are Our loyal.

multi-product above consistently leading XXX% continue results market as are consecutive spending with in The retention dollar-based remains a from the innovation more These demand our mid-market customers retention XX% enterprise field to execution with X XXX%, also environment, strong year-over-year. strong teams. XX%, expansion growth, ARR, driven drive than and $XXX,XXX up go-to-market sixth gross it during annually quarter, robust over in-period by platform has net to segments increasing years. for Our the Customer above for was and quarter.

PagerDuty and optimize that essential a innovate deliver projects. infrastructure and their require platform talent, cloud towards superior transformation. automates operations. transformation customer drive in is action initiatives adoption customers’ long-term multiyear to digital and maturity are to and digital for partner In digital they strategic a their experiences accelerating orchestrates order Our strategic digital

of high-value the to ones new by PagerDuty’s platform, stifle foundation can Operations data use operations. work types and often our experts hamper teams transformation are overwhelmed. favorable. and often behind resulting and It’s for Operations yet customer of most innovation, for for standard capacity. as interdependent, mission-critical, unstructured, favorite brands. becoming of proprietary like security more of initiatives. Digital robotics which automation IT and at architectures, quickly demand scale interrupt compete DevOps orchestration trusted cases for to across XXX and with Digital developers simplify knowledge growth complex, platform serving distributed this our density easy on distributed infrastructures in Cloud all and incidents, Cloud interrupt manual is is the our in-house leveraging is driving demand by are and conditions strategic by our leadership for complex proliferation the and on unplanned, is throughout our work. resilient work technical underpinned both increasingly SREs, traditional and deployment, operations for organizations, platform leaders trusted Developers, the work, PagerDuty deploy enemy modern attention, service and designed markets. and outpacing cloud-native, data Interrupt set and digital The human time-sensitive, base and extending operations market customer developer your and remain Unmanaged, continuous both integrations digital ecosystem. built firefighting the data Our is the nearly target its has for and enables where standard workers. Surging mode Built operations expectations integration all innovation. quickly emerged impact our

has opportunities automation capacity this and telling up improving efficiency. environment, rapidly workflow and this insights AI-based tight incidents, In increasingly freeing Our identify and time-sensitive while important. become

significantly platform their recruiting a expanded with QX, leading us. deployment online During

typical with teams on back Digital PagerDuty customers, plan They XXXX. to they of our the site this engineering As Operations implemented for their in our upgraded quarter several reliability initially expansions. user

With across new incident speed March reduction first enhances We simple value events. they In of the a infrastructure, million it an year. to expected $X geographically in release, available. and ROI response trust those who Process of require including the use already have automation process in This nearly zero X.X customers and communication. of highlighted while stability solutions service On-Prem products. to now project addition handle achieved Event our making XX% Automation hallmark generally PagerDuty for security, request usability, we Intelligence, cases rapid is product our distributed

a digital We highly enterprises also both manage automation secure to that cloud-native digital an journey. fast their automation and to Runbook These to releases teams of on having without and build start response in bringing action, the towards enable operations manual combine operations infrastructure. and to step and a integration from with customers and PagerDuty PagerDuty automation along essential engagement provides process incident observability, the and operations is ability Automation, that service available preventative. our diverse accelerate customers reactive is across automation is across the with offering The platform released AIOps maturity new only SaaS cloud-native enterprise. offerings proactive digital to their

platform, a tasks of then decade. capture teams DevOps, Quantifiable to of IT for has an SailPoint, realize and online in and gains spur fix and recurring commonly areas SRE customer business, automating most in gains been PagerDuty a customers start identity service. PagerDuty automate efficiency nearly the cart to savings beyond other diagnose example, common customer security for expansion PagerDuty incidents, an security cost by to to diagnostics and and remediate Our Automation repetitive shopping Process and using failure.

incidents. as to expanded Demonstrating group their over achieve launched purchase deployed this other expanded and additional and quarter, clients enterprise. institution overall service they operations Regardless PagerDuty our incidents, a customers span is largest customer new use up across company into Even communicate commitments, our while new $X for XX% SailPoint support them a XX they improving through an adoption, a to Every entire customer in expansion tend ARR. of single several with relationship rapidly through were high-value land-and-expand delivering purchases financial Event existing of service individual expansion opportunity resolve in the in initial to This expand what ownership an PagerDuty incident addition our use motion, move product cases. leading to Response new their consolidate PagerDuty size then curve. digital or to digital in during Intelligence and initiatives presents maturity and acknowledge for for Incident reduction This investment true teams helping their million to their XXXX time achieve user enabled expand repeatedly the proactively teams. incidents in acceleration as more to customers PagerDuty them. customers applications

it our and manual, customers digital Cloud they four their expansion As value users, of PagerDuty’s our faster, while made retention of They evident responsive, up-sell and Operations it cross-sell quarter. at be drive durable to this rates, products for multiple a preventative. measure on and growing delivering opportunities, multiple became across customers. AIOps that this and Relationships and maturity curve, land net standardizing response, now five offers reactive, relationships new additional all proactive of stages with XX% dollar-based like our teams. on automation deployed X-figure added incident investment PagerDuty teams resolving issues an PagerDuty up thousands for high and

the our This two our team deep SaaS quarter, Katherine Chief in and with award-winning trust we bolstered joined Marketing Calvert and brand extending for bringing awareness, leaders. owns executive developing C-suite leadership most brand PagerDuty world’s hires. leadership the execution building and in key Officer, as Cloud demand developers startups by experience across our go-to-market largest She with innovative companies. Operations PagerDuty’s for industry and

our Webb company’s partners. litigation, new being President around experience for April, highly and Senior strategy PagerDuty Shelley We also and fortifies contracts, our impactful M&A legal and were leaders our we color. of commitments. with General to and compliance, position cause, She Impact company’s security XXX or X,XXX top by Vice in Counsel. resulting commitment deployed organizations strategic ESG and has and more and Report, policy business appointed annual regarded in across released which In deep our the Dutonians driving led Shelley globally, privacy. results than to customers time XXXX, donated while of philanthropy, leadership In hours. funding the than of as XX% a second volunteer to engagement volunteerism more volunteered detailing employee women XX% and ongoing

a Impact volunteer critical health time-sensitive We product in a to also of new on expertise partners to focus launch leveraging ensure time-critical Labs, specific program announced to the and need. our technical funding, PagerDuty with technical provides patients that support product care credits,

the customer, factors while ensuring a cognitive lives. beyond Cambridge clinicians care teams to also success that UK-based and organizations. PagerDuty, through for company Our attention, of that neuroscience risk survey and quantifies work returns. patient HIPAA social GDPR value for compliance. impact real financial if quickly PagerDuty Using patients Cognition enables delivers and our saves them is Cognition, identify PagerDuty data immediate health patients Cambridge suicide our customers health extends need reminds engage

customer Our the more trust world an operations revolutionize relevant. timely by mission anticipating to and unpredictable in has build been unexpected or never

to velocity need increasing both and economic the Given their profitably their by grow companies improving background, efficiency.

to calls in we at actively needs scaled, We resilient, digital-first are for investments and ongoing discipline, an financial agile, right economy. expenses time of evaluating platform the supports the in position to the with structure ensure and cost the our environment proven, innovation address current are growth. best that our cloud-native a The lean heightened

and committed for ‘XX. delivering our and operating scale we line in to to We full leverage year improving while as become profitable in top are FY QX growth the both durable

and Our on with services, to time accelerate and future. products demand reinforced confidence to their and efficiency multiple to efficiently We our our and engines the evolving growth. operations seek the customers customer and an more for empower our has sustained for businesses Traveling their efficiently exist digital our anticipate focus our success. teams people, teams macroeconomic will our customers in manage as to in and partners, customers see build remain climate. my We

equitable build customers trust, critical so we vision each delight Our world is an can transform where teams work, day. for more their realized all and

I’ll questions. more to look about share encourage to PagerDuty Howard, on Summit and over your With excited June call I that, our X to and beginning at the turn to annual Series investors us forward join virtually. We’re our

Howard Wilson

this on to Thank us afternoon’s day call. joining everyone you, and Jen good

and cycle to with and who customers operations. allowing are Ops revolutionize Overall, platform to value proposition and efficiency innovation, Customer is in to the on AIOps, of intent first Incident customers and of their We execution resonate talent Operations functionality continued Management strong of the rising quarterly an full In our quarter of delivered covering results expanding costs, XXXX. the rock-solid Digital of the financial fiscal PagerDuty our cadence scarce Service of Response, auto-remediation continues environment in detection the Platform Automation productivity. driving

expand our we new such open As up quarter. land new with for and Automation releases both opportunities this Process add-on as avenues platform, we our past

ago. up points our quarter, unless in XXX over XXX%, to first consecutive up XX% free sixth $XXX,XXX, paid was or with and customers posted over with are the of be up International ended As or funnel and unchanged compared year I QX customers, the QX non-GAAP increase ARR the We over are continuing marks of of provide throughout GAAP year. quarter revenue period of recurring expenses XXX% This above this XX,XXX XX% quarter, of year-over-year, of the XX% revenues Free references Revenue basis we through an release basis than XX% QX compared X% $XX the expect fiscal in all companies XXX% ago. an same to from to ago, XXX% on platform our revenues. second dollar-based to year. our results increase. at XX,XXX, net with at grew the a acceleration that paid stated, We more otherwise to on delivered the million go to retention to ended XXX DBNR remained QX in and earnings with annual in and fiscal for operating year total our sequentially at future above our paid was prior results quarter a a sequential for growth. results year before call. reconciled to continue a X year-over-year,

XX% be a QX margin at our within margin QX. of range as to to gross level Our again XX%, and expect gross target once XX% we at for QX similar was

margin and the X% year. operating $X million last an improvement the breakeven profitability final due a expectations revenue, was X% loss venture Compared better our of of guidance, on partner, establish favorable FY operating reduce operating with Japan note of to to full to joint by operating PagerDuty QX same One efficiency our million QX Our after of announced second to cash. year reiterate non-GAAP or materially to approximately fiscal ‘XX. shifting close points. our margin The compared loss sales to marketing in headcount moving growth expected in is the was to for Japan XXX than or before and improved margin quarter. first revenue in $X and quarter quarter basis We Cloud,

Now to cash.

quarter and free million. $X First negative $X cash million, was was from operations cash flow negative

and a As highest is flow and free to and flow QX vendor on annual QX. due outflows Similar reminder, period QX payments operating our last to expect cash Summit. we ESPP, consumption year, to seasonally cash debt cash in the renewals, convertible improve from

equivalents year-over-year. cash an included is quarter which renewals exceeding and XX% our million, sequential balance to range of and $XX closed during which $XXX $X of million from million, from up we the approximately $XXX benefit sheet. quarter’s at XX% Total calculated decrease Catalytic, increase deferred of the high with The revenue of revenue metric this ended QX. last the investments. cash, billings were end Quarterly call. Catalytic. in the acquisition We the provided ended from Turning in This early quarter was during year-over-year, million

expect We were trailing On XX XX%. compared above for of year in to the the a ago to provided. range QX billings to and of growth basis, a $XXX months’ previously increase be an estimate million, XX% XX% billings

above or last over year. quarter XX months trailing to at expect growth the be XX% exiting second We billings

to our guidance. now Turning

X% operating $XX range growth the $X.XX This the For the $X.XX in of a to we of of to the fiscal in million. basic million, to expect with X%. representing second range XX% revenue range quarter million an net XX%, negative of approximately of XXXX, to XX $XX of shares per implies in negative rate share outstanding margin loss

a year XX% to $XXX of million fiscal full million, are growth revenue increasing the For to XX%. we representing XXXX, $XXX to guidance rate

We $X.XX million. net approximately of improving operating of shares to to This negative for guidance to negative outstanding are per X% X%. loss $X.XX share basic with implies an margin XX

operating in to to our improved product our current so priority. trust deliver actively innovation is Q&A. innovation each for open and the up will delivering to company. want revenue efficiencies a that, We’ve consistent of acceleration continue market execution. demand, margin while With across I our I innovation, continue confident our our go-to-market quarter fund us another customers a team and cost so structure, call we driving strong and We remain and outstanding leadership the of strong tailwinds business to I quarter. in do product for year-over-year continue lean growth their and Ensuring the performance, will given can thank execution. for the

Tony Righetti

[Operator to Instructions] RBC. going Matt to at And first, we’re Hedberg turn

Let me bring Go you ahead. at, Matt.

Simran Biswal

more Hedberg. the Matt Simran little half. how question. in could bit environment second you this the feel pipeline you about Thanks our if for a for wondering talk Biswal demand was the and about I is Hey, taking overall

Jennifer Tejada

here if take very Sure. do. today. Howard, you I’ll demand to add environment. being see We’ve please Thanks continued anything, and, strong this a want to for

haven’t seen in from We signals demand change our the any customers.

have I’d projects to also solutions that customers that think infrastructure in transformation we’ve their become automate, add transformation for reduce and frankly, long-term our burn before, that is driven our most cloud I several really the their moment. a put are going made that innovation this productivity. we’ve say digital tailwinds and for costs, customers. last These good And continue. the of the by looking cash and really projects, adoption. they’re digital a investments multiyear PagerDuty I’d has them their DevOps us And in acceleration, central are for that over position talked that help improve about years

and in Intelligence, and said, So like we like Event double down see them Service in continuing invest Automation. to areas I Customer fact, Ops

So, so environment. consistent far, demand very

Simran Biswal

you. Thank Great.

Jennifer Tejada

Pleasure.

Tony Righetti

Okay.

Sanjit, Stanley. with to Sanjit going Next we’ll go be ahead. Morgan please

Sanjit Singh

a taking Thank guys question. to and up quarter slowdown. crisp QX. in potential well-executed I on the wanted thinking clean you very just about you and for are just how Really pick

said in Jen, think the to pretty looks environment script, your you. I demand great you

the potential just to risk are a into embed companies Some their slowdown of trying guidance.

you Jen, Howard, the risks how around, be for And comment maybe at on least so on for And those into guide? would around the some encapsulating of the are you one hand, maybe, is then maybe proposition question automation. value

is same tailwind. We through we’re long-term sort have of supply-demand At and go sort imbalance of engineers of between engineers support, a that which the layoffs. of lot these number time, seeing the the services companies

business weeks am the the X of view look in tech sort you’re X as a the to has services? you of risk give to proposition at near-term clear If last more to the I like represent automate can that does if space, that versus your dramatically over pickup all seems value to or layoffs have increased. a mission-critical going in us the what support wondering you to these

Jennifer Tejada

very obviously, I macro to carefully. Yes. going monitor we’re continue environment to mean, the

spending lot of in understanding what and engineers. is, are market software People in deliver customers, We’re hearing for still at. some experiences. their fact, where most accelerated, to market cases, I’m truly have time because the of there’s transformation mostly being Those train and and very a a in of tight talking models digital productivity kind to efforts still digital moved in But they’re improvements. long-term well cost revenue savings talent they

enough problem, to of of important free regardless help to XXXX away strong to a they in it’s because I and transformation improve And applications I’ve programs to these stronger in digital old we that I through Work and in. for have fact, said, going are, are cycles. and this essential on committed you etcetera. the the up we like continue and to for the big Interrupt case, XXXX, focus been market infrastructure. market have So sheets. lived around have is said, go productivity of become work. headcount, imperative, your our part demand innovation customers few them see this, And I’m services like balance of They we’re not cycle their a existing very business

your growth on point, focused look and their companies, both from ahead. where And help and continue platform, that to like discretionary infrastructure are we other in both likewise, see pipeline we, spend their essential to about to committed to our the customers judicious expenses staying can that in see having we where attach. cost very are And And looking a ways to to base our continuing shrink for strong going about of improve can. QX to us them an years, company. see improve productivity agile retention they durable stickiness full But also and find focused. I as so be FY and profitability we’re leverage year remain we right, we really for that ‘XX, but above and that’s when talk that can you the strong XX% gross our demonstrate spend, grow to our in And operating we

Sanjit Singh

I really appreciate. Thank you very much.

Jennifer Tejada

My pleasure.

Tony Righetti

Okay.

will ahead. William we Next with go Matt, from Matt Stotler hear Blair.

Matt Stotler

for just and Yes. Thanks one to the Catalytic acquisition. start taking with Maybe Hey Howard. on Jen questions. the

customer as effectively base extension on get the seems I as expands, a love workflows like already. to TAM this supply share that about little within etcetera. how chain, well talked the your thoughts stickiness Would you your this It of the the HR, address finance, So, granular into more of your very you can or just guess wallet a platform. bit compelling maybe

Jennifer Tejada

us customers. the and the mean workflows us increase of of Howard, does that take a then, I to to I in. crack for flexibility if jump that existing want you it the is our first things Catalytic in allows for can one all, at

of more So, of important, our incidents and super those it the sets to teams. incidents types widely on think because skill applicability and, seeing, is the incident utility people the of working they brings the response variable. are I sort of that’s And types that capability

types no-code But means governed super important. ability business workflow the or enables to point, workflows cases. that’s that add not across products. your we so for to also are And also verticalized different offering, by of by flexible users use own it having us our it to And create

can that our our and adjacent that for think time. core on But expand start making mentioned I in different to early teams we that themselves so integration are I ecosystem, data does on in TAM of audience over focused And ecosystem with time build use had to can operations. quarter to provider those over leading continue sure see start an an to the cases integration of and very you this and integration And grow build we enable robotics platform. a an for we our indicators where

on So, having those to to are just without them the starting build things top directly. platform of drive us

Howard Wilson

platform add would I see ways Summit the to that Catalytic next is some you just in start events will And our already week. in be which embedded to Yes. at be of able our starting that

to a So, selling makes a intent, really cases, into to put acquisition, but standalone it product, to this the easier. did use as but are those lot different technology different where taking our discussed whole Catalytic then we already cases when be and was we are that use as the to able the customers us drive just platform not we the today

Matt Stotler

obviously, ecosystem, partner those just side, is recently. Tata others. the partnerships trending that then forward? guess that months, your about see influence But And on key how Microsoft, and the helpful. business super update on have XX you months, past That’s SI one the XX Deloitte, ecosystem, Any the had have follow-up also on on ISV and AWS I for of the on side, having Salesforce we you Right. going ecosystem some talked

Jennifer Tejada

partner one Customer partners. a been key we they Operations specifically great instance, because our as try out is that about focused reasons rolled of offering. really we And be talked prioritize for We Salesforce, have have the Service and and have

and who strategic can together a partners market way. shared where our for look have very go are what kind to value of really we the a they shared in and we the So, proposition who best do values in

highly scaled investment. think really customers for on depend very on quickly grown deliver have our I that us offerings return to reliable,

continue us is set, be And and opportunities adoption double audience, good shared with so we going to obvious for us. and migration cloud opportunity an there. cloud just me you a with look meaningful partners again, so that to the And our focused see continue likewise, to AWS, on and keeping to Similar there are investment, will value it’s very And around shared pairing. – other large focused really where down, deliver there. long-term for important can But now, on is right return near teams focus priorities super important. we

Matt Stotler

Thanks questions. for taking the

Jennifer Tejada

Thanks Matt.

Tony Righetti

Okay.

Next Chad hearing Craig-Hallum. Bennett, from Chad from

Chad Bennett

am Hey guys. really about am Thanks am questions. so looks your glowing I for I I my It just… – glowing, quarter, taking but glowing like not

Jennifer Tejada

I really your background, Chad. like

Chad Bennett

Yes. I looks have it to odd. say know I that, because

a up up this a QX? quarter I graduating very, of there that customers secondary – QX for XX% something that customers the the anyway, over year-over-year in just Like from ACV, class? retention the that something I kicked that’s up-sell mean of was there guess looked the plus XX%. uncharacteristically the or that – up mean out standpoint I metrics QX strength very type just of mean net $XXX,XXX Was – think and quarter, prior Like like was up in come really questioner one of cohort on strong. secondary yes, terms to triggered gate, like kicked I obviously double very I cross-sell, almost that what So, sequentially, said, and strong a clean that or look – to $XXX,XXX like from very a metrics in strong. what in

Jennifer Tejada

just small. our which I standard small with Even expand our add of time, deal, usage. we products. more so up start then think they becomes teams a – often And see we Management. Operations business, like over those that a are start I in And And more well. Digital They engineering. think it with come like many into to Service it’s really doing executing. new play They teams land Ops other the trade Chad, then then Customer and are we consistency as to effectively. customers transactional look Then a to

call that go-to-market out. the about I start quarters, to our that? both last to of about, am see to engineering starting to of really we investment them teams, have teams and couple rate, think it, our And the the add all you would If really those know more because see talked of innovation multi-product great just XX it’s good over than to we see and our last, pay you the proud than investments pushed if attach customers over of two the strategy anything more you hard coming have years. I And life. It’s XX% really platform have products. don’t Howard, to really to are

Howard Wilson

incremental it we purchases, Yes. as customers make seeing easier I think to a I company, made have product-led of the up, smaller would add right. in, growth are benefits that showing too, for we because

of do then can don’t and the to tickets us. go the like do a small can have They they they easily grow but purchase big with So, gate. out purchase,

SMB and for sense all an see is existing we them. so customers, makes of not trial for self-service our can the available discovery product that example, to can it Intelligence Event improved our have space. So, in-product And in also – customer, whether only

more So, that means making also that it’s accessible. multi-product

so And some complements of to that the really of now because is lifting. helping sales the the efforts product the team, do

set well can being the of. sales be So, customer team able with value the customer and something up see is already to that the to the really engage

Chad Bennett

Jennifer always XXX% with expansion right? of I said like you product popped said, expansion has the last have been growth, Howard, And a sub-segments so of and the user for – one Got but up over follow-up X-plus it. of always maybe have then couple historically, think net net we a And innovation ton years. main driver

that have Event Rundeck, a you way? on, Customer got going on in how net do you got up-sell or AIOps, Service forward? a about cross-sell, Intelligence about bigger have How needle should going you think is lot the have it and terms in we of got forth. expansion And things moving so guess think You – and I

Howard Wilson

Yes.

So, the have it’s combination factors. you still of highlighted –

still is to most been us the success the another leads platform truly expansion because as often be multiproduct, playing team. to user team broaden success one able and bigger obvious part. to way, So, we have with with the that is a But

products, are we that coming to of multiproduct an using seeing continued customers customers increase. from has number multiple ARR So, and increasing

As over customers call of with that’s coming more last the the products. QX, at had we two end of from said ARR we our or in XX%

the additional we is sight created from Service definitely So, like new Service other like But with Customer Ops, things driver not lose expansion perspective. an of have that’s be proving to Ops. Customer a an dimension land to right,

created automation. have those PagerDuty a And their able land with with. into own begin on to come are to We effectively new

now is not start And go to you with so there. Incident and multiple expanding PagerDuty. there as in though from have of Response is ways It

and actually place can expand from start You in another there.

Chad Bennett

Yes. Got it. Well, job again. great thanks and

Howard Wilson

Chad. you, Thank

Jennifer Tejada

you, Thank Chad.

Tony Righetti

Okay.

hear will Kothari. we from Shrenik Next

Shrenik Kothari

Hey. really the from This paying growth execution like well. Congrats look, is and trends Shrenik great at to a on enterprise market On overall year-on-year you really elaborated strong and as great quarter, relative is Jen on, seasonal customer clean Baird. Howard. just middle XX% that first typical

XX%, been play execution wondering, little at you from go-to-market hearing that saw less you than But Just dynamics? dynamic of kind on a a Howard, are the of like said, expansions Are you the talk the of other top very customer can that like places is super at as and end the So, really for funnel $XXX,XXX. the are was solid. relative to just about of strong, the market, saying the we to strong, $XXX,XXX growing you customers, play down enterprise going at still macro sequentially the $XX,XXX. have lower market more seeing

curious, just like see market? effects down little there you So, kind bit macro of is a that any

Jennifer Tejada

growth SMB small when very tends startups. We or Online business our that at tech teams fact, companies to we standard if product-led very segment product, to that It them. And PagerDuty try incredibly project PD that us new to small be to team is start free the their of The about QX, smaller internally, I and or the again, So, prefer, way. attribute much strong. those look motion. work. that fact what the there smaller have are very grows that was capability. that in that’s executing as they becomes in for it tends self-serve, can quickly that of And very our refer and inside be And discover using our business with it Think business customers business well. to would then

we there. fact, has in And seen in signal a been So, performing robustly. haven’t segment demand very change that

Shrenik Kothari

source the expansion, for Thanks one and guys essentially out And of side, called color I there. it. the international that key quick and it at growth you have taken follow-up like initiatives the if have flat just heard was your Got right. as That driver of on you total, XX% Jen.

would and would ForEx what any constant like any currency, on like like? look it about wondering Just impact that or different look

Howard Wilson

Sure. Yes.

us Shrenik, most So, of of for today, in a as are company, – our U.S. contracts all dollars.

they where with So, USD. in are, us no our customers matter contract

So, to foreign for really us – FX limited expenses. exposure largely is

change to the what we our the closely to-date is having or ability more material customers that high at in of fact customers buy. expensive not is – in had demand. seen the has impacting on any it’s their engagement that for impact, that so drive is negative is local have becoming strengthening it very currencies value we impact we the U.S. And whether the the do the dollar a like their and on that However, look our or just

Shrenik Kothari

Howard. Got good Thanks congrats quarter. Thanks the again it. and on

Howard Wilson

Thank you.

Jennifer Tejada

you. Thank

Tony Righetti

comments. for that’s questions it for Jennifer, you final looks today. Folks, like it to

Jennifer Tejada

Month confident it. that, you around and community, work for great first our how a thanks off to I our over ID&E continue optimistic and Month personally their sure and PagerDuty. appreciate to and to all I great just customers future at celebrating to wish addition wanted have Pride in durable employee who wanted ability am company their resource time am just and groups we and American a as our to are say just also with Well, our well shareholders within I With hard celebrated teams day. about to being our profitable company. and us month really growth teams our Islander build day Thanks our Pacific have I for want I recently our to make I Asian execution and a say just jobs today. recognize in Heritage These last that kicked to and

PagerDuty (PD) 3 Jun 222023 Q1 Earnings call transcript