PagerDuty shares drop due to weak sales cycles, but growth in high-value customers and partnerships

From Nasdaq: 2024-12-18 10:26:00

PagerDuty (PD) shares have dropped 15.7% year-to-date, underperforming peers like Atlassian (TEAM). Weakness in Small and Medium-sized Business and a challenging macroeconomic environment have impacted sales cycles. However, PD is seeing growth in high-value customers and benefiting from increased adoption of its Operations Cloud, including AI-driven automation solutions.

PagerDuty has introduced AI-driven solutions like PagerDuty Advance to improve incident management and reduce response times. These innovations have attracted more customers seeking to automate and optimize IT operations. The company’s AIOps and Automation capabilities have been key contributors, accounting for over 40% of its net new ARR in the third quarter of 2024.

PagerDuty is expanding its clientele through partnerships with industry players like Amazon (AMZN) and Snowflake (SNOW). Integrations with Amazon Web Service tools and Snowflake Trail are enhancing incident management and operational efficiency. The company’s growing portfolio and partnerships are driving its attractiveness to investors.

For the fourth quarter of 2024, PagerDuty expects revenues between $118.5 million and $120.5 million, with non-GAAP earnings projected between 15-16 cents per share. The company also provided guidance for fiscal 2024, expecting revenues in the range of $464.5 million-$466.5 million and non-GAAP earnings between 78-79 cents per share. These estimates show a positive outlook for PD’s financial performance.

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Read more at Nasdaq: PagerDuty Declines 16% YTD: Should You Buy the Stock on the Dip?