Summary
PagerDuty posted another quarter of rapid top-line growth in FY2023 Q1, but the income statement showed the cost of that growth. Revenue rose 34.3% year over year to $85.4 million. Gross profit increased 31.0% to $69.7 million. Gross margin slipped 2.0 percentage points to 81.6%. The company reported a GAAP operating loss of $32.5 million, and GAAP operating margin was negative 38.0%, down 4.6 percentage points from the prior-year quarter. GAAP net loss widened to $32.8 million. GAAP diluted net loss per share was -$0.38, and that loss widened from the prior-year quarter. The MD&A attributes the revenue increase to growth from both new and existing customers, with existing customers expanding through more users and upsell of additional products and services.
The non-GAAP picture was less severe. Non-GAAP operating loss was $2.3 million, and non-GAAP operating margin was negative 2.7%. Non-GAAP net loss per share was $0.04. Non-GAAP gross margin was 84.4%, compared with 85.2% in the prior-year quarter. The gap between GAAP and non-GAAP results remains large, largely because of stock-based compensation. Operating cash flow was negative $3.0 million, a swing from positive operating cash flow in the prior-year quarter. Free cash flow was negative $5.8 million. Capital expenditures were $2.1 million, up 124.2% year over year. Deferred revenue rose 32.7% to $167.3 million, and remaining performance obligations rose 23.9% to $141.4 million.
Customer metrics stayed strong. Total paid customers reached 15,040 as of April 30, 2022, compared with 13,918 a year earlier. Customers with annual recurring revenue above $100,000 rose to 655 from 458. Dollar-based net retention rate was 126%, compared with 121%. International revenue was 24% of total revenue, compared with 25%. The company completed the Catalytic acquisition, released new automation products, and made senior appointments. Shelley Webb was appointed Senior Vice President, General Counsel, and Katherine Post Calvert was appointed Chief Marketing Officer. PagerDuty also published its second annual Impact Report and featured a case study on SailPoint. Lands and expands mentioned DocuSign, Cisco Systems, Genentech, Mattel, Shopify, and World Market. Management described the demand environment as sustained and pointed to enterprise and mid-market strength.
Guidance for the next quarter and full year remained constructive. For FY2023 Q2, PagerDuty expects revenue of $87.0 million to $89.0 million, representing growth of 29% to 32% year over year, and a non-GAAP net loss per share of $0.09 to $0.08. For the full fiscal year 2023, it expects revenue of $364.0 million to $369.0 million, or growth of 29% to 31%, and a non-GAAP net loss per share of $0.21 to $0.17. The company said it is raising its full year top and bottom line guidance, and it remains committed to profitability in Q4 FY23 and for the full year FY24.
The risks are broad. The COVID-19 pandemic could still affect U.S. and global markets, operations, revenue results, cash flow, operating expenses, demand, sales cycles, customer retention, and customers' businesses. The Russia-Ukraine conflict could create greater global economic disruption. PagerDuty also faces competition, dependence on revenue from a single product, the challenge of sustaining and managing growth, and the need to attract new customers and retain and sell additional functionality and services to existing customers. General global market, political, economic, and business conditions are also listed as risks. The quarter showed healthy demand, but GAAP losses widened and operating cash flow turned negative. That mix leaves execution on profitability and cash generation as the key items to watch.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2023 | Q4 FY2022 | QoQ | Q1 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $85.4M | $78.5M | +8.7% | $63.6M | +34.3% |
| Gross profit | $69.7M | $64.6M | +7.9% | $53.2M | +31.0% |
| Gross margin | 81.6% | 82.3% | -0.7 pp | 83.6% | -2.0 pp |
| Research & development | $31.3M | $27.6M | +13.3% | $20.6M | +51.9% |
| Sales & marketing | $45.6M | $43.4M | +5.0% | $37.2M | +22.3% |
| General & administrative | $25.3M | $20.8M | +21.8% | $16.6M | +52.4% |
| Total operating expenses | $102.1M | $91.8M | +11.3% | $74.4M | +37.2% |
| Operating income (loss) | -$32.5M | -$27.2M | -19.3% | -$21.2M | -52.8% |
| Operating margin | -38.0% | -34.6% | -3.4 pp | -33.4% | -4.6 pp |
| Net income (loss) | -$32.8M | -$28.9M | -13.6% | -$22.6M | -45.5% |
| Net margin | -38.4% | -36.8% | -1.6 pp | -35.5% | -3.0 pp |
| Diluted EPS | -$0.38 | -$0.34 | -$0.04 | — | — |
| Net retention rate | 126.0% | 124.0% | +2.0 pp | 121.0% | +5.0 pp |
Risks
The filing warns that unfavorable global economic conditions, including inflation and reductions in information technology spending, could limit growth. It also notes that larger competitors may lower prices in challenging markets.
Russia's invasion of Ukraine and related sanctions create global security concerns and may heighten the risk of security breaches, malware, and supply-chain attacks. MD&A says the conflict is not currently material but could materially impact results if it continues or worsens.
PagerDuty plans further international expansion; customers outside the United States generated 24% of revenue in fiscal 2022 and about 29% of full-time employees were outside the United States as of January 31, 2022. This creates operational, tax, labor, currency, and compliance challenges.
The risk factors state that larger competitors with greater financial resources may respond to difficult market conditions by lowering prices to attract PagerDuty's customers. Increased industry consolidation may also reduce overall spending on its products.
The COVID-19 pandemic continued into fiscal 2023, and the filing says its effects may have a delayed impact on results of operations. Office reopenings and resumed business travel may also increase incremental expenses.
SaaS KPIs
All quarters →Free Cash Flow Margin
Non-GAAP Operating Margin
Free Cash Flow
Dollar-Based Net Retention Rate
Total Paid Customers
Non-GAAP Gross Margin
Summary, forecast, risks and KPIs are extracted from PagerDuty, Inc.'s SEC filings for Q1 FY2023 (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.