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

Kingsley Crane: Right. Makes sense. And Jen, you mentioned customers looking to do more with less. So in the case that a customer is slow in hiring or is not expanding seats as quickly? Could that be a catalyst to start looking at more automation features?

Jennifer Tejada: And we definitely seen that, we’ve seen that both inside of IT and outside of IT. I think it creates a huge opportunity in Customer Service Operations. I think it’s going to create opportunities across the business, particularly with flexible workflows coming out, but for sure, we have definitely seen a transition in the conversation from, I just want to advance my DevOps transformation to how can you help me do more with less. How can I reduce that toil on my precious developer team and enable — not that they are precious but they are precious resources and enable them to more effectively focus on high value impact. The other thing that I would say is that even in a difficult macro environment, incidents don’t go away, and in fact they become much more expensive because it’s harder to attract new customers for almost all businesses.

So if you’ve paid to get a new customer into your product experience, and then something goes wrong, that loss is much larger, the longer it takes you to detect it, to understand it and then recover from it. And so I think that’s one of the things, the fact that incidents are very expensive business for all of our customers that has made us essential infrastructure in an environment like this, and I would say there is just more of an appetite now even for individuals who historically might have been worried about being automated out of a job. There’s much more appetite for how can I demonstrate and more productive by using automation right we’re even encouraging that across our own business like encouraging our employees to use automation instead of doing things manually to improve the productivity of their team, so that they can increase their own capacity.

Kingsley Crane: Right. Really helpful. Thank you.

Jennifer Tejada: Thank you.

Operator: Okay. It looks like we’re down to a couple more hands up, We have Andrew Sherman from Cowen. Andrew, go ahead please.

Andrew Sherman: Great, thanks so much, (ph). Congrats on the quarter Jen, the big aerospace win was impressive. I think that kind of customer in industry is somewhat new for you, could this become a larger trend as those kinds of customers and industries grow their digital maturity?

Jennifer Tejada: Well, we have definitely seen a lot of momentum over the last couple of years frankly in highly regulated more traditional industries as more and more of their business has become digital and it’s that digital transformation is not something you can sort of stop midway through and kind of take a break, like it’s something that’s going on Rathi Murthy, who is the customer and a Board member who was talking about. Expedia’s digital transformation yesterday or two days ago on AWS stage, and I mean it’s a multiyear, sometimes multi decade challenge. Well, one of the things I like that I’m seeing about our business is even some of the most traditional industries that have historically been slow to adopt digital automations slow to shift the way, they do DevOps or SRE, are coming to PagerDuty and making big bets on us.

That deal In particular, one of the things I liked about it was total platform included automation and multiyear. So that’s a long-term partnership but we’re going to learn a lot from that as well, but it was a customer who had been with us before, seen very immediate high value and made it — made those discussions much easier in terms of how you expand on the renewal on the back of that.

Andrew Sherman: Yes, that’s great. And it sounds like the U.S. had a strong quarter. But I wanted to ask about Europe and others performed relative to expectations? And what your expectations there are going forward?