PagerDuty, Inc 10-Q for FY2021 Q1

PagerDuty, Inc. (PD)

10-Q 2020-06-05 For: 2020-04-30

Added on April 08, 2026

About this 10-Q

PagerDuty, Inc filed this 10-Q on June 5, 2020, covering the quarter ended April 30, 2020 (FY2021 Q1).

Headline figures

Quarter ended April 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $49.79M; up 33.4% from $37.31M a year earlier
Net loss: $11.46M; compared with a net loss of $12.06M a year earlier

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Delaware		27-2793871
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)



Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.000005 par value	PD	New York Stock Exchange



Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	☐
		Emerging growth company	☒



Item 1	Financial Statements (unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations and Comprehensive Loss	6
	Condensed Consolidated Statements of Stockholders’ Equity	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3	Quantitative and Qualitative Disclosures about Market Risk	33
Item 4	Controls and Procedures	34



Item 1	Legal Proceedings	35
Item 1A	Risk Factors	35
Item 2	Unregistered Sale of Equity Securities and Use of Proceeds	37
Item 6	Exhibits	37
	Signatures	39



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


•	the effect of uncertainties related to the novel coronavirus and resulting COVID-19 pandemic on U.S. and global markets, our business, operations, revenue results, cash flow, operating expenses, demand for our solutions, sales cycles, customer retention, and our customers’ businesses;


•	trends in key business metrics, including number of customers and dollar-based net retention rate, and non-GAAP financial measures and their usefulness in evaluating our business;


•	trends in operating expenses, including research and development, sales and marketing, and general and administrative expense, and expectations regarding these expenses as a percentage of revenue;


•	our existing cash and cash equivalents and cash provided by sales of our subscriptions being sufficient to support working capital and capital expenditures for at least the next 12 months;


•	our efforts to maintain proper and effective internal controls;


•	our ability to expand our operations and increase adoption of our platform internationally;


•	our ability to stay abreast of new or modified laws and regulations that currently apply or become applicable to our business both in the United States and internationally;


•	the increased expenses and administrative workload associated with being a public company; and


•	trends in revenue, cost of revenue, and gross margin;



	As of April 30, 2020			As of January 31, 2020
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	139,455		$	124,024
Accounts receivable, net of allowance for doubtful accounts of $1,490 and $810 as of April 30, 2020 and January 31, 2020, respectively	36,527			37,128
Investments	211,352			227,375
Deferred contract costs, current	9,769			9,301
Prepaid expenses and other current assets	10,209			7,163
Total current assets	407,312			404,991
Property and equipment, net	13,211			12,369
Deferred contract costs, non-current	16,335			16,387
Lease right-of-use assets	28,000			—
Other assets	1,461			1,651
Total assets	$	466,319		$	435,398
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	4,625		$	6,434
Accrued expenses and other current liabilities	6,374			7,197
Accrued compensation	14,911			13,911
Deferred revenue, current	91,648			87,490
Lease liabilities, current	4,633			—
Total current liabilities	122,191			115,032
Deferred revenue, non-current	4,798			5,079
Lease liabilities, non-current	30,260			—
Other liabilities	1,527			7,349
Total liabilities	158,776			127,460
Commitments and contingencies (Note 8)
Stockholders’ equity:
Common stock	—			—
Additional paid-in capital	497,430			487,008
Accumulated other comprehensive income	779			137
Accumulated deficit	(190,666		)	(179,207		)
Total stockholders’ equity	307,543			307,938
Total liabilities and stockholders’ equity	$	466,319		$	435,398



	Three Months Ended April 30,
	2020			2019
Revenue	$	49,786		$	37,314
Cost of revenue	6,963			5,486
Gross profit	42,823			31,828
Operating expenses:
Research and development	15,014			10,906
Sales and marketing	26,736			21,167
General and administrative	13,673			12,484
Total operating expenses	55,423			44,557
Loss from operations	(12,600		)	(12,729		)
Interest income	1,353			889
Other income, net	19			21
Loss before provision for income taxes	(11,228		)	(11,819		)
Provision for income taxes	(231		)	(245		)
Net loss	$	(11,459	)	$	(12,064	)
Other comprehensive income:
Unrealized gain on investments	642			—
Total comprehensive loss	$	(10,817	)	$	(12,064	)
Net loss per share, basic and diluted	$	(0.15	)	$	(0.37	)
Weighted average shares used in calculating net loss per share, basic and diluted	77,770			32,510



	Three Months Ended April 30, 2020
	Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income		Accumulated Deficit			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-in Capital			Accumulated Other Comprehensive Income		Accumulated Deficit			Total Stockholders’ Equity
Balances as of January 31, 2020	77,793,540	$	—	$	487,008		$	137	$	(179,207	)	$	307,938
Issuance of common stock upon exercise of stock options and restricted stock agreements, net of repurchases	729,425	—		1,844			—		—			1,844
Vesting of restricted stock units, net of employee payroll taxes	3,039	—		(46		)	—		—			(46		)
Vesting of early exercised options	—	—		316			—		—			316
Stock-based compensation	—	—		8,308			—		—			8,308
Other comprehensive income	—	—		—			642		—			642
Net loss	—	—		—			—		(11,459		)	(11,459		)
Balances as of April 30, 2020	78,526,004	$	—	$	497,430		$	779	$	(190,666	)	$	307,543


•	other statements regarding our future operations, financial condition, and prospects and business strategies.



	Three Months Ended April 30, 2019
	Redeemable Convertible Preferred Stock					Common Stock			Additional Paid-in Capital		Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares		Amount			Shares	Amount		Additional Paid-in Capital		Accumulated Deficit			Total Stockholders’ Equity (Deficit)
Balances as of January 31, 2019	41,273,345		$	173,023		23,189,921	$	—	$	59,938	$	(128,868	)	$	(68,930	)
Issuance of common stock upon exercise of stock options and restricted stock agreements, net of repurchases	—		—			951,830	—		2,240		—			2,240
Exercise of common stock warrants	—		—			737,807	—		—		—			—
Issuance of common stock in connection with initial public offering, net of underwriting discounts and issuance costs	—		—			9,860,500	—		213,697		—			213,697
Conversion of convertible preferred stock to common stock in connection with initial public offering	(41,273,345	)	(173,023		)	41,273,345	—		173,023		—			173,023
Repayment of promissory note	—		—			—	—		515		—			515
Vesting of early exercised options	—		—			—	—		334		—			334
Stock-based compensation	—		—			—	—		4,812		—			4,812
Net loss	—		—			—	—		—		(12,064		)	(12,064		)
Balances as of April 30, 2019	—		$	—		76,013,403	$	—	$	454,559	$	(140,932	)	$	313,627



	As of April 30, 2020		As of January 31, 2020
	(in thousands)
Cash and cash equivalents
Cash	$	18,510	$	2,131
Money market funds	120,395		118,899
Commercial paper	550		—
U.S. Treasury securities	—		2,994
Total cash and cash equivalents	$	139,455	$	124,024
Available-for-sale investments:
U.S. Treasury securities	$	21,082	$	24,987
Commercial paper	10,419		20,132
Corporate debt securities	161,804		149,248
U.S. Government agency securities	5,000		4,973
Total available-for-sale investments	$	198,305	$	199,340
Held-to-maturity investments:
U.S. Treasury securities	$	6,012	$	9,016
Commercial paper	1,495		5,985
Corporate debt securities	5,540		13,034
Total held-to-maturities investments	$	13,047	$	28,035
Total investments	$	211,352	$	227,375



	As of April 30, 2020
	Cost Basis		Unrealized Gain, Net		Recorded Basis
Available-for-sale investments:
U.S. Treasury securities	$	20,953	$	129	$	21,082
Commercial paper	10,415		4		10,419
Corporate debt securities	161,165		639		161,804
U.S. Government agency securities	4,993		7		5,000
Total available-for-sale investments	$	197,526	$	779	$	198,305
Held-to-maturity investments:
U.S. Treasury securities	$	6,012	$	—	$	6,012
Commercial paper	1,495		—		1,495
Corporate debt securities	5,540		—		5,540
Total held-to-maturities investments	$	13,047	$	—	$	13,047
Total investments	$	210,573	$	779	$	211,352



	As of April 30, 2020
	Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	120,395	$	—	$	—	$	120,395
U.S. Treasury securities	—		27,094		—		27,094
Commercial paper	550		11,914		—		12,464
Corporate debt securities	—		167,344		—		167,344
U.S. Government agency securities	—		5,000		—		5,000
Total	$	120,945	$	211,352	$	—	$	332,297
Included in cash equivalents							$	120,945
Included in investments							$	211,352



	Three Months Ended April 30, 2020
	(in thousands)
Operating lease expense	$	1,442
Short-term lease expense	299
Variable lease expense	302



	Three Months Ended April 30, 2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	1,138



Year ending January 31,
	(in thousands)
2021	$	4,246
2022	6,303
2023	6,474
2024	6,655
2025	6,854
Thereafter	8,870
Gross lease payments	$	39,402
Less: Imputed interest	(4,509		)
Total	$	34,893



	April 30, 2020
Outstanding stock options and unvested RSUs outstanding	16,779,058
Available for future stock option and RSU grants	13,831,235
Available for ESPP	2,417,141
Total common stock reserved at April 30, 2020	33,027,434



	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
						(in thousands)
Outstanding at January 31, 2020	14,498,045		$	7.37	7.8 years	$	231,300
Granted	140,270		$	15.89
Exercised	(730,363	)	$	2.55
Canceled	(540,609	)	$	10.54
Outstanding at April 30, 2020	13,367,343		$	7.59	7.6 years	$	180,717
Vested as of April 30, 2020	7,421,194		$	4.72	6.9 years	$	121,656



	Number of RSUs		Weighted Average Grant Date Fair Value Per Share
Outstanding at January 31, 2020	1,114,911		$	28.10
Granted	2,326,489		$	15.89
Vested, net of shares withheld for employee payroll taxes	(3,039	)	$	24.88
Canceled	(26,646	)	$	28.45
Outstanding at April 30, 2020	3,411,715		$	19.78



	As of April 30,
	2020	2019
	(in thousands)
Shares subject to outstanding common stock awards	16,780	16,529
Unvested early exercised stock options	27	273
Restricted stock awards purchased with promissory notes	180	472
Shares issuable pursuant to the 2019 Employee Stock Purchase Plan	165	—
Total	17,152	17,274



	Last 12 Months Ended April 30,
	2020		2019
Dollar-based net retention rate for all customers	121	%	137	%



Exhibit Number	Description	Form	File No.	Incorporated by Exhibit Reference	Filing Date
3.1	Amended and Restated Certificate of Incorporation of PagerDuty, Inc.	8-K	001-38856	3.1	April 15, 2019
3.2	Amended and Restated Bylaws of PagerDuty, Inc.	8-K	001-38856	3.2	April 15, 2019
10.1	Forms of Option Agreement and Restricted Stock Unit Agreement under the 2019 Equity Incentive Plan			Filed herewith
31.1	Certification of the Chief Executive Officer pursuant to Exchange Act Rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002			Filed herewith
31.2	Certification of the Chief Financial Officer pursuant to Exchange Act Rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002			Filed herewith
32.1*	Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002			Furnished herewith
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.			Filed herewith
101.SCH	XBRL Taxonomy Extension Schema Document.			Filed herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.			Filed herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.			Filed herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.			Filed herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.			Filed herewith



		PAGERDUTY, INC.

	By:	/s/ Jennifer G. Tejada
		Jennifer G. Tejada
		Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ Owen Howard Wilson
		Owen Howard Wilson
		Chief Financial Officer
		(Principal Financial Officer)

	By:	/s/ Karen Walker
		Karen Walker
		Senior Vice President, Finance
		(Principal Accounting Officer)



Optionholder:	«Optionee»
Date of Grant:	«GrantDate»
Vesting Commencement Date:	«VestingCommenceDate»
Number of Shares Subject to Option:	«NoofShares»
Exercise Price (Per Share) (US$):	«ExercisePrice»
Total Exercise Price (US$):	«TotalExercisePrice»
Expiration Date:	«ExpirDate»


Vesting Schedule:	[__________________], subject to Participant’s Continuous Service through each such vesting date and the potential vesting acceleration described in Section 1 of the Option Agreement.]


¨	If and only to the extent this option is a Nonstatutory Stock Option, and subject to the Company’s consent at the time of exercise, by a “net exercise” arrangement



PAGERDUTY, INC. By: Signature Title: Date:	OPTIONHOLDER: Signature Date:



Type of option (check one):	Incentive ¨	Nonstatutory ¨
Stock option dated:	_______________	_______________
Number of Shares as to which option is exercised:	_______________	_______________
Certificates to be issued in name of:	_______________	_______________
Total exercise price:	$______________	$______________
Cash payment delivered herewith:	$______________	$______________
Regulation T Program (cashless exercise):	$______________	$______________
Value of ________ Shares delivered herewith:	$______________	$______________]