PagerDuty, Inc. (NYSE:PD) Q3 2023 Earnings Call Transcript

Jennifer Tejada: Well, one of the critical success factors for us is always been to make the app that our users are engaging with a simple and usable as possible, because very often using us in a moment of significant duress or stress. And so for me, it felt like a really natural next step to really move into no code or low code workflow automation, because you can’t get much simpler than sort of drag and drop. And what we’ve learned, particularly as we’ve gone into large, large enterprise, highly regulated industries, industries that have very specific requirements where they want to use us for risk mitigation or healthcare environment, et cetera. They want to change what has been historically a very deterministic workflow and so flexible workflows and no code workflows really open up a lot of that opportunity for us and just make it easier for customers to deploy PagerDuty’s automation into different types of incident response process and more broadly different types of interrupt work.

And I just can’t tell you, I mean maybe that’s because I’m from the Midwest and Catalytic as a Chicago company, but we’re thrilled with that team. It’s a great group of technologists, we’re thrilled with how well they’re advancing and progressing. And in fact our automation product had a much improved quarter this quarter as well. And so we were last quarter I think we talked about automation deals being a little bit larger and taking a little bit longer. This quarter we saw strong attach there. So really good to see some of those inorganic investments starting to take hold within the broader business.

Matt Stotler: That’s very helpful. And then maybe one on the federal vertical specifically, historically something you guys have talked about as a kind of a key parts that $1 billion growth as per aspiration. Obviously with the government fiscal year ending Q3, we’d love to just get kind of a broader update on progress there, maybe contribution that you’re seeing today.

Jennifer Tejada: Well, today Federal is a small part of our total ARR. We do see a lot of customers in the SLED, state and local government education and we are underway with our FedRAMP certification process, which will, I think open up more and more opportunities in Federal, so that’s more of a forward-looking opportunity in my view. We did — I talked earlier in my prepared remarks about a large aerospace companies Fortune 100 company and what I loved about that deal is they are a customer that was able to tell us they realized tremendous return on investments 30 times their initial investment and a very high ROI and so they really doubled down on our products and services. And we’d like to see that kind of advancement in these tightly regulated industries because it demonstrates how truly horizontal PagerDuty can be. I don’t know, Howard, if you have anything to add there.

Howard Wilson: No, I think you’ve covered it.

Matt Stotler: Great, thank you again.

Operator: Okay. Thank you. And next, we would like to welcome Fred Lee from Credit Suisse.

Fred Lee: All right, Hey Jennifer. Hey, Howard.

Howard Wilson: Hey, Fred how are you?

Jennifer Tejada: Hey, Fred.

Fred Lee: Hey, and getting go blue.

Jennifer Tejada: Go blue.

Fred Lee: If you get the here in Scottsdale, this week, but hopefully we’ll see you in Phoenix at the game, right?

Jennifer Tejada: Maybe, maybe, I hope so.