What happened
Shares of PagerDuty (PD 1.62%) were moving lower today after the cloud-computing stock's first-quarter earnings report wasn't enough to please investors. As of 11:22 a.m. ET, the stock was down 9%.
So what
PagerDuty, whose software notifies businesses of outages and issues with their digital infrastructure, said that revenue in the quarter rose 28% to $63.6 million, edging out estimates at $62 million. The company now has more than 16,800 customers with annual recurring revenue of more than $1,000,000. That was up 55%, and dollar-based net retention was 121%, so its customer base from a year ago increased its spending by 21%.
Image source: Getty Images.
On the bottom line, its adjusted loss per share widened from $0.04 a year ago to $0.08 as the company ramped up sales and marketing spending. That result was $0.01 better than estimates.
CEO Jennifer Tejada said:
PagerDuty's business is benefiting from recovery, as both the macro trends and market landscape continue to move in our favor. As communities, industries, and businesses move forward to a post-pandemic world, our platform is essential infrastructure for our customers. Building off a strong close to fiscal 2021, we beat both our top and bottom line guide.
Now what
While the first-quarter results were solid, investors seemed less impressed with the company's guidance.
For the second quarter, PagerDuty expects revenue growth of 27%-31% to $64.5 million-$66.5 million, which was slightly ahead of the consensus at $63.8 million. On the bottom line, however, it forecast a loss of $0.15-$0.16, worse than estimates of $0.09.
Considering the stock has gained nearly 60% since the start of 2020, the subpar bottom-line guidance seemed to be enough to sink the stock today.
