Summary
PagerDuty closed its fiscal 2024 third quarter with revenue of $108.7 million, up 15.4% from the prior-year quarter. Gross profit rose 16.8% to $89.0 million, and gross margin was 81.9%, up 1.0 percentage point. The company still posted a GAAP operating loss of $20.8 million, though that loss narrowed from the prior-year quarter. Operating margin was negative 19.2%, up 15.4 percentage points. Net loss attributable to PagerDuty was $12.8 million, a narrower loss than a year ago. Diluted EPS was negative $0.16, an improvement of $0.20. On a non-GAAP basis, operating income was $15.0 million and operating margin was 13.8%. Non-GAAP net income per diluted share was $0.20.
For the first nine months of fiscal 2024, revenue rose 18.4% to $319.6 million. Gross profit rose 20.4% to $262.1 million, and gross margin was 82.0%, up 1.3 percentage points. Nine-month operating margin was negative 19.7%, up 18.5 percentage points. The nine-month operating loss narrowed to $62.8 million, and the net loss narrowed to $47.0 million. Diluted EPS was negative $0.55, an improvement of $0.63. Operating cash flow for the quarter was $16.9 million, up $17.36 million from the prior-year quarter. Operating cash flow for the nine months was $49.8 million, up $50.41 million. Free cash flow was $15.2 million. Capital expenditures were $0.2 million for the quarter, down $0.57 million, and $1.2 million for the nine months, down $2.56 million. Deferred revenue was $196.4 million, up 9.3%, and remaining performance obligations were $206.0 million, up 18.2%.
Annual recurring revenue grew 13% to $438.9 million. Customers with annual recurring revenue above $100,000 reached 778, compared with 710 a year earlier. Dollar-based net retention was 110%, compared with 123% a year earlier. Total free and paid customers exceeded 27,000, representing approximately 18% growth. Total paid customers were 15,049, compared with 15,265 a year earlier. Management attributed revenue growth to a combination of growth from new and existing customers, with existing customer growth from increases in users and upsell of additional products and services.
Product and corporate activity continued. PagerDuty launched new AI capabilities across the PagerDuty Operations Cloud, including PagerDuty Copilot and workflow automation for Salesforce Service Cloud and Zendesk. The Fall 2023 release includes event orchestration and runbook automation. The company acquired Jeli, Inc. on November 15, 2023, to expand its incident management offerings. In the quarter, PagerDuty closed a $350 million convertible senior notes offering and repurchased $230.0 million in aggregate principal of its 2025 Notes for cash payments of $223.5 million. The company also appointed Eric Johnson as Chief Information Officer and was named a leader in GigaOm's 2023 Incident Response Platforms Radar evaluation. Lands and expands included Banco Santander, Carhartt, Carparts.com, Cloudflare, Docaposte, Equinix, Salesforce, Snowflake, and The Vanguard Group.
For the fourth quarter of fiscal 2024, PagerDuty expects total revenue growth of 8% to 10% year over year and non-GAAP net income per diluted share of $0.14 to $0.15 on approximately 95 million diluted shares. For the full fiscal year 2024, the company expects total revenue growth of 16% year over year and non-GAAP net income per diluted share of $0.72 to $0.73 on approximately 101 million diluted shares. Risks include macroeconomic conditions, global inflation, higher interest rates, recession or economic downturn, geopolitical conflicts, bank failures and foreign currency volatility. The company also cites risks around achieving and maintaining future profitability, attracting new customers, retaining and selling additional services to existing customers, sustaining growth, competing effectively, and dependence on a single product. The year-over-year change in dollar-based net retention and the paid customer count bear watching.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $108.7M | $107.6M | +1.0% | $94.2M | +15.4% |
| Gross profit | $89.0M | $87.8M | +1.4% | $76.2M | +16.8% |
| Gross margin | 81.9% | 81.6% | +0.3 pp | 80.9% | +1.0 pp |
| Research & development | $34.3M | $36.4M | -6.0% | $35.0M | -2.1% |
| Sales & marketing | $49.6M | $49.7M | -0.2% | $47.1M | +5.3% |
| General & administrative | $26.0M | $27.8M | -6.6% | $26.6M | -2.5% |
| Total operating expenses | $109.9M | $114.0M | -3.6% | $108.7M | +1.0% |
| Operating income (loss) | -$20.8M | -$26.2M | +20.4% | -$32.5M | +36.0% |
| Operating margin | -19.2% | -24.3% | +5.1 pp | -34.5% | +15.4 pp |
| Net income (loss) | -$13.1M | -$22.6M | +42.1% | -$32.8M | +60.1% |
| Net margin | -12.0% | -21.0% | +9.0 pp | -34.8% | +22.8 pp |
| Diluted EPS | -$0.16 | -$0.26 | +$0.10 | -$0.36 | +$0.20 |
| Customers | 15,265 | 15,174 | +0.6% | — | — |
| Net retention rate | 110.0% | 114.0% | -4.0 pp | 123.0% | -13.0 pp |
Risks
The filing re-emphasizes cyber risk, noting security measures have been compromised in the past and specifically citing a 2015 breach where a database containing user information was compromised. Severe ransomware, third-party provider attacks, and remote-work exposure could disrupt service, trigger regulatory investigations, litigation, fines, and customer loss.
In October 2023 PagerDuty issued $402.5 million aggregate principal of 1.50% convertible senior notes due 2028 and repurchased $230.0 million principal of its 2025 notes. Risk factors warn that cash flow may be insufficient to settle conversions or repurchase notes upon a fundamental change, which could force asset sales, dilutive financing, or default.
Key business metrics show dollar-based net retention rate for all customers was 110% for the last 12 months ended October 31, 2023 versus 123% for the prior-year period, while total customers were 15,049 versus 15,265. This indicates slower expansion and potential churn even as customers with over $100,000 in ARR grew to 778 from 710.
Capped call transactions with financial institution counterparties expose PagerDuty to credit risk. If an Option Counterparty defaults or enters insolvency, the company could suffer more dilution and adverse tax consequences, with no collateral securing the exposure.
MD&A highlights worldwide macroeconomic conditions including global inflation, rising interest rates, recession or economic downturn, bank failures, and geopolitical conflicts such as Russia-Ukraine and Israel. These could reduce customer spending and impair results.
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
Non-GAAP Operating Income
Annual Recurring Revenue (ARR)
Customers > $100K ARR
Total Free and Paid Customers
Summary, forecast, risks and KPIs are extracted from PagerDuty, Inc.'s SEC filings for Q3 FY2024 (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.