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PagerDuty (PD) Q4 Loss Narrower Than Expected, Revenues Rise

PagerDuty, Inc. PD reported fourth-quarter fiscal 2021 non-GAAP loss of 7 cents per share, narrower than the Zacks Consensus Estimate of a loss of 12 cents but wider than the year-ago quarter’s loss of 3 cents.

Revenues of $59.3 million increased 29.1% on a year-over-year basis, primarily driven by customer addition. The figure beat the consensus estimate for revenues by 3.19%.

During fiscal 2021, the company continued to see strength in the enterprise and mid-market, with total dollar-based net retention of 121% and enterprise dollar-based net retention of more than 125% at the end of the year.

PagerDuty Inc. Price, Consensus and EPS Surprise

PagerDuty Inc. price-consensus-eps-surprise-chart | PagerDuty Inc. Quote

Customer Growth

PagerDuty had 13,800 customers as of Jan 31, 2021. New enterprise customers added within the quarter included Ally Financial, Ameren Corporation, Jetblue Airways, Sega Sammy Holdings, SK Telecom, and WaWa while customer expansions included Dropbox, Marqeta, Morgan Stanley, Netflix, Okta, and Slack.

PagerDuty had a record-setting quarter closing its largest one time, multi-year expansion in history, its first million-dollar contract in Europe, Middle East, and Africa (EMEA), and achieving record transaction growth in the mid-market. For the year, annual recurring revenue (ARR) from the PagerDuty Digital Operations plan doubled and now accounts for more than 20% of total ARR.

Moreover, PagerDuty has more than 530 total integrations and a deep bench of partners now. During the fiscal fourth quarter, PagerDuty announced a product collaboration with Amazon DevOps Guru, an operational insight service powered by machine learning from Amazon Web Services.

Quarter Details

In fourth-quarter fiscal 2021, non-GAAP gross profit rose 27.5% year over year to $50.8 million. Gross margin contracted 110 basis points (bps) to 85.6%.

Non-GAAP research & development (R&D) expenses increased 14.3% to $13.8 million. Additionally, non-GAAP sales & marketing (S&M) expenses rose 35.4% year over year to $30 million Moreover, non-GAAP general & administrative (G&A) expenses increased 29.5% to $12.4 million.

Non-GAAP operating loss of $5.4 million was wider than the year-ago quarter’s loss of $3.9 million.

Balance Sheet & Cash Flow

As of Jan 31, 2021, PagerDuty had cash and cash equivalents and current investments of $560.2 million compared with $556.2 million in the previous quarter.

Net cash provided by operating activities was $3.4 million, up 87.6% year over year. Free cash flow was $2.27 million. The company had reported free cash outflow of $0.8 million in the year-ago quarter.

Guidance

For first-quarter fiscal 2022, revenues are anticipated between $61 million and $63 million indicating year-over-year growth of 23-27%. Non-GAAP net loss per share is expected between 9 cents and 10 cents.

For fiscal 2022, revenues are anticipated between $264 million and $270 million. Non-GAAP net loss per share is expected between 36 cents and 43 cents.

Zacks Rank & Stocks to Consider

Currently, PagerDuty carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector include Celestica, Inc. CLS, Sanmina Corporation SANM and CDW Corporation CDW, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for Sanmina Corporation, Celestica and CDW Corporation is currently pegged at 4.2%, 12%, and 13.1%, respectively.

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Sanmina Corporation (SANM): Free Stock Analysis Report
 
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