PagerDuty Inc. (PD) shares experienced a decline in Tuesday’s after-hours trading following the company’s release of mixed financial results for the second quarter.
While revenue came in slightly below analyst expectations, reaching $115.9 million compared to an anticipated $116.48 million, earnings per share (EPS) surpassed estimates. The company reported an EPS of 21 cents, exceeding the projected 17 cents.
Despite the mixed performance, PagerDuty highlighted positive indicators. Total revenue saw a year-over-year increase of 7.7%. Furthermore, the company generated a robust $35.8 million in net cash from operations and $33.3 million in free cash flow during the quarter.
The company’s customer base continued to expand, with over 29,000 free and paid customers at the end of the quarter. Notably, the number of customers with annual recurring revenue exceeding $100,000 grew by 6% to 820 as of July 31. PagerDuty ended the period with a strong cash position, holding $599.3 million in cash, cash equivalents, and investments.
Jennifer Tejada, Chairperson and CEO of PagerDuty, expressed confidence in the company’s performance, stating, “PagerDuty delivered a solid second quarter with revenue growth within our guidance range, a non-GAAP operating margin four points above the range, and our eighth consecutive quarter of non-GAAP profitability. We remain confident in ARR growth acceleration as global outages reinforce that incident management has become a CEO priority.”
Looking ahead, PagerDuty anticipates third-quarter revenue to fall within the range of $115.5 million to $117.5 million, compared to analysts’ estimates of $116.5 million. The company also projects adjusted earnings for the third quarter to be between 16 cents and 17 cents per share, in line with estimates of 17 cents per share.
Management will host a conference call at 5 p.m. ET to discuss PagerDuty’s second-quarter performance in greater detail.
In response to the financial report, PD shares experienced a significant drop of 12.68% after hours, closing at $15.97 at the time of publication.
