Le Lézard
Classified in: Science and technology, Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

PagerDuty Announces Third Quarter Fiscal 2023 Financial Results


PagerDuty, Inc. (NYSE:PD), a leader in digital operations management, today announced financial results for the third quarter of fiscal 2023, ended October 31, 2022.

"PagerDuty delivered another strong quarter, exceeding the high end of both our top and bottom line ranges, with revenue up 31% year on year, and operating margin improving 1,000 basis points to achieve profitability a quarter ahead of expectations," said Jennifer Tejada, Chair and CEO at PagerDuty. "Despite a volatile macroeconomic backdrop, we made significant progress in realizing profitable, durable growth. PagerDuty's Operations Cloud deploys easily, has a high ROI, and low cost of ownership ? more relevant than ever in today's environment. Our enterprise customers remain focused on minimizing the impact of incidents to protect revenue and deliver great customer experiences while reducing their costs. For them, PagerDuty is essential infrastructure."

Third Quarter Fiscal 2023 Financial Highlights

The section titled "Non-GAAP Financial Measures" below contains a description of the non-GAAP financial measures and reconciliations between historical GAAP and non-GAAP information.

Third Quarter and Recent Highlights

Financial Outlook

For the fourth quarter of fiscal 2023, PagerDuty currently expects:

For the full fiscal year 2023, PagerDuty currently expects:

These statements are forward-looking and actual results may differ materially. Please refer to the Forward-Looking Statements section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

PagerDuty has not reconciled its expectations as to non-GAAP net income (loss) per share attributable to PagerDuty, Inc. to GAAP net loss per share attributable to PagerDuty, Inc. because certain items are out of its control or cannot be reasonably predicted. Accordingly, a reconciliation for forward-looking non-GAAP net income (loss) per share attributable to PagerDuty, Inc. is not available without unreasonable effort.

Conference Call Information:

PagerDuty will host a conference call and live webcast for analysts and investors at 2:00 p.m. Pacific Time on December 1, 2022. This news release with the financial results will be accessible from PagerDuty's website at investor.pagerduty.com prior to the conference call. A live webcast of the conference call will be accessible from the PagerDuty investor relations website at investor.pagerduty.com.

Supplemental Financial and Other Information:

Supplemental financial and other information can be accessed through PagerDuty's investor relations website at investor.pagerduty.com. PagerDuty uses the investor relations section on its website as the means of complying with its disclosure obligations under Regulation FD. Accordingly, we recommend that investors monitor PagerDuty's investor relations website in addition to following PagerDuty's press releases, SEC filings, social media, including PagerDuty's LinkedIn account (https://www.linkedin.com/company/482819), Twitter account (twitter.com/pagerduty), the Twitter account @jenntejada and Facebook page (facebook.com/pagerduty), and public conference calls and webcasts.

Non-GAAP Financial Measures:

This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss) attributable to PagerDuty, Inc., non-GAAP net income (loss) per share attributable to PagerDuty, Inc., and free cash flow.

PagerDuty believes that non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past financial performance and can assist in comparisons with other companies, some of which use similar non-GAAP financial measures to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.

The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in PagerDuty's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by PagerDuty's management about which expenses and income are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each historical non-GAAP financial measure to the most directly comparable financial measure presented in accordance with GAAP.

Specifically, PagerDuty excludes the following from its historical and prospective non-GAAP financial measures, as applicable:

Stock-based Compensation: PagerDuty utilizes stock-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of its stockholders and at long-term retention, rather than to address operational performance for any particular period. As a result, stock-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.

Employer Taxes Related to Employee Stock Transactions: PagerDuty views the amount of employer taxes related to its employee stock transactions as an expense that is dependent on its stock price, employee exercise and other award disposition activity, and other factors that are beyond PagerDuty's control. As a result, employer taxes related to employee stock transactions vary for reasons that are generally unrelated to financial and operational performance in any particular period.

Amortization of Acquired Intangible Assets: PagerDuty views amortization of acquired intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of purchased intangibles is an expense that is not typically affected by operations during any particular period.

Acquisition-Related Expenses: PagerDuty views acquisition-related expenses, such as transaction costs, acquisition-related retention payments, and acquisition-related asset impairment, as events that are not necessarily reflective of operational performance during a period. In particular, PagerDuty believes the consideration of measures that exclude such expenses can assist in the comparison of operational performance in different periods which may or may not include such expenses.

Amortization of Debt Issuance Costs: The imputed interest rate of the Convertible Senior Notes (the "Notes") was approximately 1.93%. This is a result of the debt issuance costs, which reduce the carrying value of the convertible debt instruments. The debt issuance costs are amortized as interest expense. The expense for the amortization of the debt issuance costs is a non-cash item, and we believe the exclusion of this interest expense will provide for a more useful comparison of our operational performance in different periods.

Income Tax Effect of Non-GAAP Adjustments: PagerDuty excludes the related income tax effect of the non-GAAP adjustments described above and eliminates the impact of non-recurring and period specific items, which can vary in size and frequency. In particular, PagerDuty believes the consideration of measures that exclude such impacts can assist in the comparison of operational performance in different periods, which may or may not include items such as acquisition related income tax benefits. In the nine months ended October 31, 2022, the balance excludes the impact of non-recurring items for acquisition related income tax benefits. To date, the income tax effect of the non-GAAP adjustments has not been material.

PagerDuty defines non-GAAP operating income (loss) as GAAP loss from operations excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, and acquisition-related expenses. PagerDuty defines non-GAAP net income (loss) attributable to PagerDuty, Inc. (which is used in calculating non-GAAP net income (loss) per share attributable to PagerDuty, Inc.) as GAAP net loss attributable to PagerDuty, Inc. excluding amortization of debt issuance costs and debt discount, stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, acquisition-related expenses, and the associated tax impact of these items, where applicable. There are a number of limitations related to the use of these non-GAAP measures as compared to GAAP operating loss and net loss, including that the non-GAAP measures exclude stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in PagerDuty's business and an important part of its compensation strategy.

PagerDuty defines free cash flow as net cash provided by (used in) operating activities, less cash used for purchases of property and equipment and capitalized internal-use software. In addition to the reasons stated above, PagerDuty believes that free cash flow is useful to investors as a liquidity measure because it measures PagerDuty's ability to generate or use cash in excess of its capital investments in property and equipment to strengthen its balance sheet and further invest in its business and potential strategic initiatives. PagerDuty uses free cash flow in conjunction with traditional GAAP measures as part of its overall assessment of its liquidity, including the preparation of PagerDuty's annual operating budget and quarterly forecasts, to evaluate the effectiveness of its business strategies, and to assess its liquidity.

There are a number of limitations related to the use of free cash flow as compared to net cash provided by (used in) operating activities, including that free cash flow includes capital expenditures, the benefits of which are realized in periods subsequent to those when expenditures are made.

PagerDuty encourages investors to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate PagerDuty's business.

Please see the reconciliation tables at the end of this release for the reconciliation of GAAP and non-GAAP results.

Forward-Looking Statements:

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our future financial performance and outlook and market positioning. Words such as "expect," "extend," "anticipate," "should," "believe," "hope," "target," "project," "accelerate," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," "shall" and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks and other factors detailed in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 17, 2022. Additional information will be made available in our Quarterly Report on Form 10-Q for the quarter ended October 31, 2022 and other filings and reports that we may file from time to time with the SEC. In particular, the following risks and uncertainties, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: the effect of uncertainties related to the COVID-19 pandemic on U.S. and global markets, our business, operations, revenue results, cash flow, operating expenses, demand for our solutions, sales cycles, customer retention and our customers' businesses; our ability to achieve and maintain future profitability; our ability to attract new customers and retain and sell additional functionality and services to our existing customers; our ability to sustain and manage our growth; our dependence on revenue from a single product; our ability to compete effectively in an increasingly competitive market; and general global market, political, economic, and business conditions.

Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

About PagerDuty

PagerDuty, Inc. (NYSE:PD) is a leader in digital operations management. In an always-on world, organizations of all sizes trust PagerDuty to help them deliver a better digital experience to their customers, every time. Teams use PagerDuty to identify issues and opportunities in real time and bring together the right people to fix problems faster and prevent them in the future. Notable customers include Cisco, Genentech, Electronic Arts, Cox Automotive, Shopify, Zoom, DoorDash and more. To learn more and try PagerDuty for free, visit www.pagerduty.com. Follow our blog and connect with us on Twitter, LinkedIn, YouTube and Facebook. We're also hiring, visit https://www.pagerduty.com/careers/ to learn more.

PagerDuty, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2022

 

2021

 

2022

 

2021

Revenue

$

94,203

 

 

$

71,760

 

 

$

269,827

 

 

$

202,887

 

Cost of revenue(1)

 

18,007

 

 

 

12,039

 

 

 

52,090

 

 

 

34,433

 

Gross profit

 

76,196

 

 

 

59,721

 

 

 

217,737

 

 

 

168,454

 

Operating expenses:

 

 

 

 

 

 

 

Research and development(1)

 

35,004

 

 

 

24,554

 

 

 

100,307

 

 

 

68,062

 

Sales and marketing(1)

 

47,118

 

 

 

40,176

 

 

 

143,001

 

 

 

118,224

 

General and administrative(1)

 

26,616

 

 

 

19,808

 

 

 

77,316

 

 

 

56,680

 

Total operating expenses

 

108,738

 

 

 

84,538

 

 

 

320,624

 

 

 

242,966

 

Loss from operations

 

(32,542

)

 

 

(24,817

)

 

 

(102,887

)

 

 

(74,512

)

Interest income

 

1,382

 

 

 

705

 

 

 

2,760

 

 

 

2,306

 

Interest expense

 

(1,360

)

 

 

(1,350

)

 

 

(4,072

)

 

 

(4,045

)

Other expense, net

 

(172

)

 

 

(729

)

 

 

(1,326

)

 

 

(1,931

)

Loss before (provision for) benefit from income taxes

 

(32,692

)

 

 

(26,191

)

 

 

(105,525

)

 

 

(78,182

)

(Provision for) benefit from income taxes

 

(112

)

 

 

(150

)

 

 

1,302

 

 

 

(378

)

Net loss

$

(32,804

)

 

$

(26,341

)

 

$

(104,223

)

 

$

(78,560

)

Net loss attributable to redeemable non-controlling interest

 

(262

)

 

 

?

 

 

 

(362

)

 

 

?

 

Net loss attributable to PagerDuty, Inc.

$

(32,542

)

 

$

(26,341

)

 

$

(103,861

)

 

$

(78,560

)

Net loss per share, basic and diluted, attributable to PagerDuty, Inc.

$

(0.36

)

 

$

(0.31

)

 

$

(1.18

)

 

$

(0.94

)

Weighted-average shares used in calculating net loss per share, basic and diluted

 

89,285

 

 

 

85,092

 

 

 

88,200

 

 

 

83,979

(1)

 

Includes stock-based compensation expense as follows:

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2022

 

2021

 

2022

 

2021

Cost of revenue

$

1,937

 

$

861

 

$

4,948

 

$

2,560

Research and development

 

10,824

 

 

6,183

 

 

30,066

 

 

16,230

Sales and marketing

 

8,004

 

 

4,606

 

 

22,533

 

 

12,961

General and administrative

 

10,679

 

 

6,128

 

 

28,931

 

 

16,115

Total

$

31,444

 

$

17,778

 

$

86,478

 

$

47,866

PagerDuty, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

 

 

As of October 31, 2022

 

As of January 31, 2022

 

 

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

262,333

 

 

$

349,785

 

Investments

 

197,104

 

 

 

193,571

 

Accounts receivable, net of allowance for credit losses of $1,515 and $1,809 as of
October 31, 2022 and January 31, 2022, respectively

 

72,628

 

 

 

75,279

 

Deferred contract costs, current

 

18,007

 

 

 

16,672

 

Prepaid expenses and other current assets

 

13,545

 

 

 

9,777

 

Total current assets

 

563,617

 

 

 

645,084

 

Property and equipment, net

 

18,339

 

 

 

18,229

 

Deferred contract costs, non-current

 

26,968

 

 

 

26,159

 

Lease right-of-use assets

 

15,141

 

 

 

20,227

 

Goodwill

 

118,862

 

 

 

72,126

 

Intangible assets, net

 

40,029

 

 

 

23,133

 

Other assets

 

1,054

 

 

 

1,490

 

Total assets

$

784,010

 

 

$

806,448

 

Liabilities, redeemable non-controlling interest, and stockholders' equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

7,692

 

 

$

9,505

 

Accrued expenses and other current liabilities

 

12,884

 

 

 

13,640

 

Accrued compensation

 

34,955

 

 

 

35,327

 

Deferred revenue, current

 

175,380

 

 

 

162,881

 

Lease liabilities, current

 

6,438

 

 

 

5,637

 

Total current liabilities

 

237,349

 

 

 

226,990

 

Convertible senior notes, net

 

282,445

 

 

 

281,069

 

Deferred revenue, non-current

 

4,335

 

 

 

7,343

 

Lease liabilities, non-current

 

14,155

 

 

 

20,912

 

Other liabilities

 

3,826

 

 

 

3,159

 

Total liabilities

 

542,110

 

 

 

539,473

 

Redeemable non-controlling interest

 

1,551

 

 

 

?

 

Stockholders' equity:

 

 

 

Common stock

 

?

 

 

 

?

 

Additional paid-in-capital

 

696,169

 

 

 

616,467

 

Accumulated other comprehensive loss

 

(3,136

)

 

 

(669

)

Accumulated deficit

 

(452,684

)

 

 

(348,823

)

Total stockholders' equity

 

240,349

 

 

 

266,975

 

Total liabilities, redeemable non-controlling interest, and stockholders' equity

$

784,010

 

 

$

806,448

 

PagerDuty, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2022

 

2021

 

2022

 

2021

Cash flows from operating activities

 

 

 

 

 

 

 

Net loss attributable to PagerDuty, Inc.

$

(32,542

)

 

$

(26,341

)

 

$

(103,861

)

 

$

(78,560

)

Net loss attributable to redeemable non-controlling interest

 

(262

)

 

 

?

 

 

 

(362

)

 

 

?

 

Net loss

 

(32,804

)

 

 

(26,341

)

 

 

(104,223

)

 

 

(78,560

)

Adjustments to reconcile net loss to net cash (used in) provided by
operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

4,498

 

 

 

2,133

 

 

 

12,778

 

 

 

6,160

 

Amortization of deferred contract costs

 

4,922

 

 

 

3,839

 

 

 

14,178

 

 

 

10,651

 

Amortization of debt issuance costs

 

461

 

 

 

452

 

 

 

1,376

 

 

 

1,350

 

Stock-based compensation

 

31,444

 

 

 

17,778

 

 

 

86,478

 

 

 

47,866

 

Non-cash lease expense

 

611

 

 

 

1,122

 

 

 

2,913

 

 

 

3,331

 

Tax benefit related to release of valuation allowance

 

?

 

 

 

?

 

 

 

(1,330

)

 

 

?

 

Other

 

(124

)

 

 

897

 

 

 

1,686

 

 

 

2,592

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

(13,473

)

 

 

(6,113

)

 

 

3,048

 

 

 

360

 

Deferred contract costs

 

(6,290

)

 

 

(7,357

)

 

 

(16,323

)

 

 

(16,842

)

Prepaid expenses and other assets

 

(1,424

)

 

 

1,905

 

 

 

(2,934

)

 

 

(857

)

Accounts payable

 

1,109

 

 

 

2,657

 

 

 

(1,117

)

 

 

3,836

 

Accrued expenses and other liabilities

 

(4,593

)

 

 

(3,452

)

 

 

(1,350

)

 

 

(79

)

Accrued compensation

 

6,034

 

 

 

7,590

 

 

 

(624

)

 

 

3,760

 

Deferred revenue

 

10,181

 

 

 

8,848

 

 

 

8,635

 

 

 

12,878

 

Lease liabilities

 

(1,000

)

 

 

(1,308

)

 

 

(3,783

)

 

 

(3,812

)

Net cash (used in) provided by operating activities

 

(448

)

 

 

2,650

 

 

 

(592

)

 

 

(7,366

)

Cash flows from investing activities

 

 

 

 

 

 

 

Purchases of property and equipment

 

(815

)

 

 

(85

)

 

 

(3,755

)

 

 

(1,376

)

Capitalization of internal-use software costs

 

(988

)

 

 

(784

)

 

 

(2,725

)

 

 

(2,701

)

Business acquisition, net of cash acquired

 

?

 

 

 

?

 

 

 

(66,262

)

 

 

(160

)

Asset acquisition

 

?

 

 

 

?

 

 

 

(1,845

)

 

 

?

 

Purchases of available-for-sale investments

 

(59,842

)

 

 

(34,505

)

 

 

(155,310

)

 

 

(150,608

)

Proceeds from maturities of available-for-sale investments

 

54,425

 

 

 

40,466

 

 

 

149,625

 

 

 

156,616

 

Proceeds from sales of available-for-sale investments

 

?

 

 

 

?

 

 

 

?

 

 

 

27,380

 

Net cash (used in) provided by investing activities

 

(7,220

)

 

 

5,092

 

 

 

(80,272

)

 

 

29,151

 

Cash flows from financing activities

 

 

 

 

 

 

 

Investment from redeemable non-controlling interest holder

 

?

 

 

 

?

 

 

 

1,908

 

 

 

?

 

Proceeds from employee stock purchase plan

 

?

 

 

 

?

 

 

 

5,736

 

 

 

4,889

 

Proceeds from issuance of common stock upon exercise of stock options

 

1,899

 

 

 

5,087

 

 

 

8,459

 

 

 

12,517

 

Employee payroll taxes paid related to net share settlement of restricted stock units

 

(9,864

)

 

 

(7,616

)

 

 

(22,187

)

 

 

(18,619

)

Net cash used in financing activities

 

(7,965

)

 

 

(2,529

)

 

 

(6,084

)

 

 

(1,213

)

Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash

 

(365

)

 

 

?

 

 

 

(504

)

 

 

?

 

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

(15,998

)

 

 

5,213

 

 

 

(87,452

)

 

 

20,572

 

Cash, cash equivalents, and restricted cash at beginning of period

 

278,331

 

 

 

354,525

 

 

 

349,785

 

 

 

339,166

 

Cash, cash equivalents, and restricted cash at end of period

$

262,333

 

 

$

359,738

 

 

$

262,333

 

 

$

359,738

 

PagerDuty, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except percentages)
(unaudited)

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2022

 

2021

 

2022

 

2021

Reconciliation of gross profit and gross margin

 

 

 

 

 

 

 

GAAP gross profit

$

76,196

 

 

$

59,721

 

 

$

217,737

 

 

$

168,454

 

Plus: Stock-based compensation

 

1,937

 

 

 

861

 

 

 

4,948

 

 

 

2,560

 

Plus: Employer taxes related to employee stock transactions

 

38

 

 

 

22

 

 

 

79

 

 

 

78

 

Plus: Amortization of acquired intangible assets

 

1,949

 

 

 

280

 

 

 

5,314

 

 

 

840

 

Non-GAAP gross profit

$

80,120

 

 

$

60,884

 

 

$

228,078

 

 

$

171,932

 

GAAP gross margin

 

80.9

%

 

 

83.2

%

 

 

80.7

%

 

 

83.0

%

Non-GAAP adjustments

 

4.2

%

 

 

1.6

%

 

 

3.8

%

 

 

1.7

%

Non-GAAP gross margin

 

85.1

%

 

 

84.8

%

 

 

84.5

%

 

 

84.7

%

 

 

 

 

 

 

 

 

Reconciliation of operating expenses

 

 

 

 

 

 

 

GAAP research and development

$

35,004

 

 

$

24,554

 

 

$

100,307

 

 

$

68,062

 

Less: Stock-based compensation

 

(10,824

)

 

 

(6,183

)

 

 

(30,066

)

 

 

(16,230

)

Less: Employer taxes related to employee stock transactions

 

(202

)

 

 

(212

)

 

 

(559

)

 

 

(618

)

Less: Acquisition-related expenses

 

(738

)

 

 

(442

)

 

 

(3,100

)

 

 

(1,348

)

Less: Amortization of acquired intangible assets

 

(29

)

 

 

?

 

 

 

(145

)

 

 

?

 

Non-GAAP research and development

$

23,211

 

 

$

17,717

 

 

$

66,437

 

 

$

49,866

 

 

 

 

 

 

 

 

 

GAAP sales and marketing

$

47,118

 

 

$

40,176

 

 

$

143,001

 

 

$

118,224

 

Less: Stock-based compensation

 

(8,004

)

 

 

(4,606

)

 

 

(22,533

)

 

 

(12,961

)

Less: Employer taxes related to employee stock transactions

 

(148

)

 

 

(175

)

 

 

(468

)

 

 

(533

)

Less: Amortization of acquired intangible assets

 

(643

)

 

 

(595

)

 

 

(1,936

)

 

 

(1,785

)

Non-GAAP sales and marketing

$

38,323

 

 

$

34,800

 

 

$

118,064

 

 

$

102,945

 

 

 

 

 

 

 

 

 

GAAP general and administrative

$

26,616

 

 

$

19,808

 

 

$

77,316

 

 

$

56,680

 

Less: Stock-based compensation

 

(10,679

)

 

 

(6,128

)

 

 

(28,931

)

 

 

(16,115

)

Less: Employer taxes related to employee stock transactions

 

(195

)

 

 

(286

)

 

 

(650

)

 

 

(857

)

Less: Acquisition-related expenses

 

(164

)

 

 

?

 

 

 

(1,454

)

 

 

(8

)

Less: Amortization of acquired intangible assets

 

(7

)

 

 

?

 

 

 

(36

)

 

 

?

 

Non-GAAP general and administrative

$

15,571

 

 

$

13,394

 

 

$

46,245

 

 

$

39,700

 

Note: Certain figures may not sum due to rounding.

PagerDuty, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except percentages and per share data)
(unaudited)

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2022

 

2021

 

2022

 

2021

Reconciliation of operating income (loss) and operating margin

 

 

 

 

 

 

 

GAAP operating loss

$

(32,542

)

 

$

(24,817

)

 

$

(102,887

)

 

$

(74,512

)

Plus: Stock-based compensation

 

31,444

 

 

 

17,778

 

 

 

86,478

 

 

 

47,866

 

Plus: Employer taxes related to employee stock transactions

 

583

 

 

 

695

 

 

 

1,756

 

 

 

2,086

 

Plus: Amortization of acquired intangible assets

 

2,628

 

 

 

875

 

 

 

7,431

 

 

 

2,625

 

Plus: Acquisition-related expenses

 

902

 

 

 

442

 

 

 

4,554

 

 

 

1,356

 

Non-GAAP operating income (loss)

$

3,015

 

 

$

(5,027

)

 

$

(2,668

)

 

$

(20,579

)

GAAP operating margin

 

(34.5

) %

 

 

(34.6

) %

 

 

(38.1

) %

 

 

(36.7

) %

Non-GAAP adjustments

 

37.7

%

 

 

27.6

%

 

 

37.1

%

 

 

26.6

%

Non-GAAP operating margin

 

3.2

%

 

 

(7.0

) %

 

 

(1.0

) %

 

 

(10.1

) %

 

 

 

 

 

 

 

 

Reconciliation of net income (loss)

 

 

 

 

 

 

 

GAAP net loss attributable to PagerDuty, Inc.

$

(32,542

)

 

$

(26,341

)

 

$

(103,861

)

 

$

(78,560

)

Plus: Stock-based compensation

 

31,444

 

 

 

17,778

 

 

 

86,478

 

 

 

47,866

 

Plus: Employer taxes related to employee stock transactions

 

583

 

 

 

695

 

 

 

1,756

 

 

 

2,086

 

Plus: Amortization of debt discount

 

461

 

 

 

452

 

 

 

1,376

 

 

 

1,350

 

Plus: Amortization of acquired intangible assets

 

2,628

 

 

 

875

 

 

 

7,431

 

 

 

2,625

 

Plus: Acquisition-related expenses

 

902

 

 

 

442

 

 

 

4,554

 

 

 

1,356

 

Less: Income tax effect of non-GAAP adjustments

 

?

 

 

 

?

 

 

 

(1,330

)

 

 

?

 

Non-GAAP net income (loss) attributable to PagerDuty, Inc.

$

3,476

 

 

$

(6,099

)

 

$

(3,596

)

 

$

(23,277

)

 

 

 

 

 

 

 

 

Reconciliation of net income (loss) per share, basic

 

 

 

 

 

 

 

GAAP net loss per share, basic, attributable to PagerDuty, Inc.

$

(0.36

)

 

$

(0.31

)

 

$

(1.18

)

 

$

(0.94

)

Non-GAAP adjustments to net loss attributable to PagerDuty, Inc.

 

0.40

 

 

 

0.24

 

 

 

1.14

 

 

 

0.66

 

Non-GAAP net income (loss) per share, basic, attributable to PagerDuty, Inc.

$

0.04

 

 

$

(0.07

)

 

$

(0.04

)

 

$

(0.28

)

 

 

 

 

 

 

 

 

Reconciliation of net income (loss) per share, diluted(1)

 

 

 

 

 

 

 

GAAP net loss per share, diluted, attributable to PagerDuty, Inc.

$

(0.36

)

 

$

(0.31

)

 

$

(1.18

)

 

$

(0.94

)

Non-GAAP adjustments to net loss attributable to PagerDuty, Inc.

 

0.40

 

 

 

0.24

 

 

 

1.14

 

 

 

0.66

 

Non-GAAP net income (loss) per share, diluted, attributable to PagerDuty, Inc.

$

0.04

 

 

$

(0.07

)

 

$

(0.04

)

 

$

(0.28

)

 

 

 

 

 

 

 

 

Weighted-average shares used in calculating GAAP net loss per share,
basic and diluted

 

89,285

 

 

 

85,092

 

 

 

88,200

 

 

 

83,979

 

 

 

 

 

 

 

 

 

Weighted-average shares used in calculating non-GAAP net
income (loss) per share

 

 

 

 

 

 

 

Basic

 

89,285

 

 

 

85,092

 

 

 

88,200

 

 

 

83,979

 

Diluted

 

100,941

 

 

 

85,092

 

 

 

88,200

 

 

 

83,979

 

Note: Certain figures may not sum due to rounding.

(1)

 

The company uses the if-converted method to calculate the non-GAAP net income per diluted share attributable to PagerDuty, Inc. related to the convertible notes. Approximately 7.2 million shares related to the convertible notes were therefore included in the non-GAAP diluted share number, while the numerator used to compute this measure was increased by $0.9 million for after-tax interest expense savings related to our convertible notes for the three months ended October 31, 2022.

PagerDuty, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except percentages)
(unaudited)

 

Free Cash Flow

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2022

 

2021

 

2022

 

2021

Net cash (used in) provided by operating activities

$

(448

)

 

$

2,650

 

 

$

(592

)

 

$

(7,366

)

Less:

 

 

 

 

 

 

 

Purchases of property and equipment

 

(815

)

 

 

(85

)

 

 

(3,755

)

 

 

(1,376

)

Capitalization of internal-use software costs

 

(988

)

 

 

(784

)

 

 

(2,725

)

 

 

(2,701

)

Free cash flow

$

(2,251

)

 

$

1,781

 

 

$

(7,072

)

 

$

(11,443

)

Net cash (used in) provided by investing activities

$

(7,220

)

 

$

5,092

 

 

$

(80,272

)

 

$

29,151

 

Net cash used in financing activities

$

(7,965

)

 

$

(2,529

)

 

$

(6,084

)

 

$

(1,213

)

Free cash flow margin

 

(2.4

) %

 

 

2.5

%

 

 

(2.6

) %

 

 

(5.6

) %

 


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