Summary
PagerDuty closed fiscal 2023 with fourth quarter revenue of $100.97 million, up 28.6% year over year. That was the company's first $100 million quarter. Full year revenue reached $370.79 million, up 31.8% from the prior year. Gross profit was $82.62 million in the quarter, up 27.9%, and $300.36 million for the full year, up 28.9%. Gross margin slipped to 81.8% in the quarter from 82.3% a year earlier, a decline of 0.4 percentage points. For the full year, gross margin was 81.0%, down 1.8 percentage points. The company posted a GAAP operating loss of $26.49 million in the quarter, a loss that narrowed 2.6% from the prior-year quarter. Full year GAAP operating loss was $129.38 million, a loss that widened 27.2%. Operating margin was -26.2% in the quarter, up 8.4 percentage points from the prior-year quarter. For the full year, operating margin was -34.9%, up 1.3 percentage points. GAAP net loss attributable to PagerDuty was $24.56 million in the quarter, narrowing 15.0% year over year. For the full year, GAAP net loss attributable to PagerDuty was $128.42 million, widening 19.5%. Diluted GAAP net loss per share was $1.45 for the full year, a loss that widened 14.2% from the prior year. Operating cash flow was $17.57 million in the quarter, up 1206.5% year over year, and $16.98 million for the full year, up 382.0%. Capital expenditures were $0.88 million in the quarter, down 57.6%, and $4.64 million for the full year, up 34.1%.
On a non-GAAP basis, the company turned a profit. Non-GAAP operating income was $6.1 million in the quarter, with a non-GAAP operating margin of 6.1%. Non-GAAP net income per diluted share was $0.08. For the full year, non-GAAP operating income was $3.5 million and non-GAAP operating margin was 0.9%. Non-GAAP net income per diluted share was $0.07. Free cash flow, a non-GAAP measure, was $15.6 million in the quarter and $8.5 million for the full year. The company ended the year with 15,244 total paid customers, up from 14,865 a year earlier. It had 752 customers with annual recurring revenue over $100,000, compared with 594, and 50 customers with ARR over $1 million, up from 43. Dollar-based net retention rate was 120%, down from 124%. International revenue represented 24% of total revenue for the fiscal year, consistent with the prior year. Deferred revenue was $209.05 million, up 22.8% year over year. Remaining performance obligations were $188.00 million, up 30.6%. The 10 largest customers accounted for about 9% of fiscal 2023 revenue, and no single customer exceeded 10%. Annual recurring revenue surpassed $400 million.
Guidance for the first quarter of fiscal 2024 calls for total revenue growth of 19% to 22% year over year. Non-GAAP net income per diluted share is expected to be $0.09 to $0.10, assuming approximately 104 million shares. For the full fiscal year 2024, the company expects total revenue growth of 20% to 22% year over year. Non-GAAP net income per diluted share is projected at $0.45 to $0.50, assuming approximately 105 million shares. The company did not reconcile forward-looking non-GAAP net income per share to GAAP net loss per share because certain items are out of its control or cannot be reasonably predicted.
The quarter included a restructuring plan announced on January 24, 2023. PagerDuty reduced headcount by 7%, reallocated roles, and began rationalizing its real estate footprint. The company expects the implementation, including cash payments, to be substantially complete by the end of the first quarter of fiscal 2024. Additional real estate charges are expected in fiscal 2024. Management highlighted several macroeconomic risks, including global inflation, rising interest rates, a potential recession, the COVID-19 pandemic, the Russia-Ukraine conflict, and bank failures. The failure of Silicon Valley Bank on March 10, 2023, is a specific concern. Other risks include dependence on a single product for a majority of revenue and intense competition. PagerDuty's top 10 customers represented about 9% of fiscal 2023 revenue.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2023 | Q3 FY2023 | QoQ | Q4 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $101.0M | $94.2M | +7.2% | $78.5M | +28.6% |
| Gross profit | $82.6M | $76.2M | +8.4% | $64.6M | +27.9% |
| Gross margin | 81.8% | 80.9% | +1.0 pp | 82.3% | -0.4 pp |
| Research & development | $34.6M | $35.0M | -1.2% | $27.6M | +25.1% |
| Sales & marketing | $52.6M | $47.1M | +11.7% | $43.4M | +21.2% |
| General & administrative | $21.9M | $26.6M | -17.6% | $20.8M | +5.6% |
| Total operating expenses | $109.1M | $108.7M | +0.3% | $91.8M | +18.9% |
| Operating income (loss) | -$26.5M | -$32.5M | +18.6% | -$27.2M | +2.6% |
| Operating margin | -26.2% | -34.5% | +8.3 pp | -34.6% | +8.4 pp |
| Net income (loss) | -$25.0M | -$32.8M | +23.8% | -$28.9M | +13.5% |
| Net margin | -24.8% | -34.8% | +10.1 pp | -36.8% | +12.0 pp |
| Diluted EPS | -$0.28 | -$0.36 | +$0.08 | -$0.34 | +$0.06 |
| Net retention rate | 120.0% | 123.0% | -3.0 pp | 124.0% | -4.0 pp |
Risks
MD&A Macroeconomic Environment highlights global inflation, rising interest rates, recession risk, and bank failures, including the FDIC taking control of Silicon Valley Bank on March 10, 2023. If other banks become insolvent, the company says its ability to access cash, cash equivalents, and investments may be threatened and customers may be unable to pay.
On January 24, 2023, the company announced a 7% headcount reduction and real estate rationalization. The risk factor says the restructuring may not deliver anticipated savings, may cost more than expected, may disrupt operations, and may cause attrition beyond planned reductions or harm hiring and retention.
The risk factor states sales of incident response offerings account for a significant majority of revenue, and MD&A Key Factors confirms this. A decline in demand, failure of the broader platform, or pricing pressure on that product would harm the business more than if revenue were diversified.
The market for digital operations solutions is highly fragmented and competitive, with named competitors including ServiceNow, Atlassian, and Splunk. The risk factor says larger competitors can bundle competing solutions at lower prices or no additional cost, causing pricing pressures.
MD&A reports dollar-based net retention rate for all customers was 120% for the fiscal year ended January 31, 2023, compared with 124% for fiscal 2022. The risk factor says if customers do not renew or reduce subscriptions at renewal, revenue and results of operations will decline.
The risk factor states loss of one or more senior managers, particularly CEO Jennifer Tejada, or other key employees could harm the business. Competition for software developers and sales personnel is intense in Silicon Valley, Canada, and Portugal, and immigration visa uncertainty could impede hiring.
The risk factor says sales to new and existing mid-market and enterprise customers involve more complex requirements, substantial upfront costs, less predictability, and potentially longer sales cycles. New sales personnel currently represent the majority of the sales force.
The risk factor and MD&A state the revenue growth rate is expected to decline as the business matures and that recent rapid growth may not be indicative of future growth. For FY2023 year to date, revenue rose 31.8%, but net loss widened 19.5% to $128.4 million and operating loss widened 27.2% to $129.4 million.
Gross margin was 81.0% for FY2023 year to date, down 1.8 percentage points from 82.8% in the prior-year period. The risk factor notes cost of revenue increased due to personnel expenses, amortization of acquired intangible assets, and hosting costs to support growth.
The risk factor says the company has limited experience making acquisitions and may fail to integrate Rundeck or Catalytic, may not achieve anticipated benefits, and may record goodwill impairment. It also cites acquisition-related costs, unknown liabilities, and diversion of management attention.
The risk factor states the first fiscal quarter is usually the lowest billings and bookings quarter, and billings and bookings in the first fiscal quarter are typically lower than the prior fiscal fourth quarter. This seasonality is expected to continue as the company targets larger enterprise customers.
SaaS KPIs
All quarters →Free Cash Flow Margin
Non-GAAP Operating Margin
Free Cash Flow
Total Paid Customers
Non-GAAP Gross Margin
Non-GAAP Operating Income
Annual Recurring Revenue
Summary, forecast, risks and KPIs are extracted from PagerDuty, Inc.'s SEC filings for Q4 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.