PagerDuty, the provider of incident-management software for IT help desks, has announced its financial results for the third quarter ended October 31. The company’s earnings surpassed both their own projections and the Street’s consensus estimates.
Q3 Revenue Growth
PagerDuty reported a revenue of $108.7 million for the quarter, marking a 15.4% increase from the previous year. This figure exceeded both the company’s projected range of $106.5 million to $108.5 million and the Street’s consensus estimate of $107.7 million, as per FactSet.
Strong Adjusted Earnings
On an adjusted basis, PagerDuty achieved an earnings per share (EPS) of 20 cents for the quarter, surpassing the projected range of 13 cents to 14 cents and the consensus estimate of 14 cents. However, under generally accepted accounting principles (GAAP), the company reported a loss of 16 cents per share.
Outlook for Q1 2022
PagerDuty has projected a revenue range of $109.5 million to $111.5 million for the upcoming January quarter, representing an 8% to 10% growth rate. This forecast aligns with the Street’s consensus estimate of $110.9 million. The company anticipates adjusted earnings per share in the range of 14 cents to 15 cents, consistent with the previous consensus estimate of 14 cents.
Company Forecasts Strong Sales Growth for Fiscal Year 2024
In an updated forecast for the fiscal year 2024, the company anticipates robust sales growth in the range of $429 million to $431 million, representing a significant increase from the previous estimate of $426 million to $430 million. Additionally, the company’s adjusted earnings per share are now projected to be between 72 cents and 73 cents, surpassing the earlier forecast of 60 cents to 65 cents. Industry analysts’ consensus estimates suggest revenue of approximately $429.3 million and adjusted profits of 64 cents, aligning closely with these expectations. Although formal financial guidance for fiscal 2025 has not yet been provided, Chief Financial Officer Howard Wilson reveals that PagerDuty, a leader in an increasingly competitive market, anticipates a modest acceleration in annual recurring revenue during this period, with reported revenue following suit. Furthermore, the company expects an improvement in operating margin for fiscal 2025, surpassing the projected 13% for fiscal 2024.
Despite grappling with challenges posed by the macroeconomic landscape, PagerDuty witnessed positive developments in new customer acquisitions and business expansion among midsize and enterprise clients. However, year-to-date performance of PagerDuty’s shares has been modest, experiencing an 18% decrease due to revised guidance earlier in the year to adapt to softer economic conditions.
