Summary
PagerDuty opened fiscal 2022 with total revenue of $63.6 million for the quarter ended April 30, 2021, up 27.7% from $49.8 million in the prior-year quarter. Management framed the growth rate as 28% in the earnings release. Gross profit climbed to $53.2 million from $42.8 million, an increase of 24.2%, so profit growth trailed revenue growth. GAAP gross margin slipped to 83.6% from 86.0%, and non-GAAP gross margin was 85.2% against 86.7% a year earlier. Higher personnel expense and greater hosting, software and support costs tied to larger, more complex deployments pushed cost of revenue up and pulled margin down.
The bottom line is the weak spot. GAAP operating loss was $21.2 million, or negative 33.4% of revenue, wider than the $12.6 million loss and negative 25.3% margin reported in the prior-year quarter. GAAP net loss reached $22.6 million, up from $11.5 million, and GAAP net loss per diluted share was $0.27. Non-GAAP results strip out stock-based compensation and related items: a non-GAAP operating loss of $5.6 million, or negative 8.8% of revenue, compared with $4.1 million and negative 8.3%, and a non-GAAP net loss of $6.5 million, or $0.08 per share, compared with $3.0 million and $0.04. Interest expense on the 1.25% convertible senior notes, which was not present a year ago, also weighed on the net loss. Stock-based compensation remains a large recurring expense and is the main reason the two loss measures diverge so widely.
Cash generation improved, but it stays thin. Net cash provided by operating activities was $1.6 million, or 2.5% of revenue, versus $0.2 million used in operating activities in the prior-year quarter. Free cash flow was negative $0.4 million compared with negative $2.9 million a year earlier. Capital expenditures, reported as purchases of property and equipment, fell 65.8% to $0.9 million. Deferred revenue reached $126.1 million, up 30.7% year over year, and remaining performance obligations were $114.1 million, up 51.7%. Cash, cash equivalents and current investments totaled $557.0 million as of April 30, 2021, which gives the company room to keep funding its current loss profile.
Customer metrics carry the growth story. More than 16,800 companies were on the platform as of April 30, 2021. Customers with more than $100,000 in annual recurring revenue rose to 458 from 348, and total customers reached 13,918 from 13,060. The dollar-based net retention rate was 121% for the twelve months ended April 30, 2021, unchanged from the prior-year period, while enterprise dollar-based net retention ran above 125%. Customers with annual recurring revenue over $1,000,000 were up 55% year over year. The integration ecosystem now spans more than 560 partners.
Guidance assumes the trend continues. For the second quarter of fiscal 2022, PagerDuty expects revenue growth of 27% to 31% year over year and a non-GAAP net loss per share of $0.16 to $0.15 on roughly 84 million shares. For the full fiscal year 2022, the company guides to revenue growth of 25% to 27% and a non-GAAP net loss per share of $0.42 to $0.36. Both targets imply continued non-GAAP losses, so expansion is still being funded ahead of profitability.
Risks are familiar but real. Management points to COVID-19 uncertainty, more variable demand from small and medium business customers, increased churn, and the possibility that customer workforce reductions shrink the user base. It also cites dependence on revenue from a single product, stiff competition, and the challenge of reaching and holding profitability. Sales and marketing and research and development spending both grew faster than revenue in the quarter, which is why GAAP margins moved the wrong way. Operating cash flow turned positive, but it is small next to a quarterly GAAP net loss of $22.6 million, and free cash flow was still negative. Execution on retention and enterprise expansion will decide whether the spending pays off.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $63.6M | $59.3M | +7.3% | $49.8M | +27.7% |
| Gross profit | $53.2M | $49.9M | +6.6% | $42.8M | +24.2% |
| Gross margin | 83.6% | 84.1% | -0.5 pp | 86.0% | -2.4 pp |
| Research & development | $20.6M | $17.9M | +15.3% | $15.0M | +37.2% |
| Sales & marketing | $37.2M | $33.9M | +9.9% | $26.7M | +39.3% |
| General & administrative | $16.6M | $16.5M | +0.3% | $13.7M | +21.2% |
| Total operating expenses | $74.4M | $68.3M | +9.0% | $55.4M | +34.3% |
| Operating income (loss) | -$21.2M | -$18.4M | -15.5% | -$12.6M | -68.6% |
| Operating margin | -33.4% | -31.0% | -2.4 pp | -25.3% | -8.1 pp |
| Net income (loss) | -$22.6M | -$22.1M | -1.9% | -$11.5M | -96.9% |
| Net margin | -35.5% | -37.4% | +1.9 pp | -23.0% | -12.4 pp |
| Customers | 13,060 | — | — | 11,680 | +11.8% |
| Net retention rate | 121.0% | 121.0% | ±0.0 pp | — | — |
Risks
COVID-19 related effects have produced an increase in churn and a decline in the number of users, and PagerDuty anticipates continued greater variability in demand from small and medium business customers plus possible reductions in customer spend, shorter contract duration and lengthened payment terms. These dynamics could materially adversely affect results in future periods even though revenue is largely subscription based.
Gross margin declined 2.4 percentage points to 83.6% in FY2022 Q1 from 86.0% in FY2021 Q1 while gross profit rose 24.2%, and operating margin fell 8.1 percentage points to -33.4% as operating loss widened 68.6% to $21.2 million and net loss widened 96.9% to $22.6 million.
Travel and in-person meeting restrictions forced Summit and other customer events to virtual formats, and the company cannot predict whether virtual events and remote sales interactions will generate leads as effectively as in-person engagement. Renewal timing also drove a $3.9 million sequential decrease in deferred revenue during the quarter.
Operating expenses grew faster than revenue, with total operating expenses reaching $74.4 million (117% of revenue) versus $55.4 million (111%) a year earlier. Sales and marketing rose 39% and research and development rose 37%, driven mainly by headcount and marketing activity, so continued spending is required to sustain growth.
Stock-based compensation expense increased to $13.6 million in FY2022 Q1 from $8.3 million in FY2021 Q1, and personnel costs from increased headcount were the primary driver of higher cost of revenue, research and development, sales and marketing and general and administrative expenses, underscoring reliance on hiring and retaining employees.
Interest expense of $1.3 million was recorded in FY2022 Q1 versus none in the prior-year quarter due to the 1.25% Convertible Senior Notes due 2025, while interest income declined 40% to $0.8 million on lower interest rates, reducing the contribution of the investment portfolio to results.
SaaS KPIs
All quarters →Free Cash Flow Margin
Non-GAAP Operating Margin
Non-GAAP Gross Margin
Customers > $100,000 ARR
Total Customers
Summary, forecast, risks and KPIs are extracted from PagerDuty, Inc.'s SEC filings for Q1 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.