We also do have, from a revenue mix perspective, we have a few elements that react positively to revenue within the quarter. For example, if we — if we’re delivering services within the quarter, it leads to some positive revenue or if we have our process automation, self-managed environment, deals done, that also has a positive contribution to revenue. So, we factor all of those in to the guidance that we gave. It’s not purely a straight flow through from the ARR.
Tony Righetti: Okay. And I do want to remind our analysts, feel free to raise your hand if you have comments or questions for the team. Next, we’re going to hear from RBC. We have Anushtha Mittal.
Anushtha Mittal: Thanks for taking my question. This is Anushtha Mittal. I have to — maybe just to start with — can you talk more about the acquisition of Jeli and how that adds value to the PagerDuty platform? And then how should we think about its contribution from a revenue or margin perspective?
Jennifer Tejada: Yes. I’ll touch on the strategy of the acquisition and then Howard can touch on the financials. I mean, we are really thrilled — excited to bring Jeli into the PagerDuty fold, mostly because our customers are super excited about it. We’ve had a strong cadence of making strategic acquisitions that both accelerate our road map and give us access to fantastic technical talent. And Jeli ticks both those boxes. But even I have been like positively surprised by how excited our customers are about this. One of the reasons I joined PagerDuty many years ago was because it was beloved by developers. And we’re hearing a very similar ethos from customers about Jeli. What Jeli does is it enables developers, IT personnel and SREs to learn immediately from an incident and apply those learnings to prevent those large major incidents from happening again.
to improve the overall resilience of their operations and production going forward and to do it pretty seamlessly. And so far, I mean, it’s only been a couple of weeks, but we’re culturally really well aligned as companies and there are a number of features, including some of Jeli Slack integrations for instance, that our customers have been asking for. So, it really did accelerate a lot of efforts that we were going to invest anyway. But the strong sort of brand preference that Jeli has in the market, that connection to developers and sort of the immediate ROI they see from Jeli gives me a lot of encouragement and optimism about what the future could look like. It is a small — they’re a very small company. And so, I know Howard would say it will be immaterial to revenue, but we do expect that it’s going to help us advance our overall incident management posture and growth in the future.
Howard Wilson: Yes. Thanks, Jen. I’ll just add a little bit of additional commentary. This was actually a Q4 event. So, it will be reflected as a subsequent event in our 10-Q, which will be released within the next day or so, typically the day after earnings. So you’ll be able to see some of the details on that. Just at a high level from a materiality perspective from a revenue contribution, it really is small, not — doesn’t really move the needle. And we factored in both the revenue and the expense components into the guide that we provided. But when I look at it, I’m more optimistic about what value it brings for us next year because we believe that leveraging our go-to-market capabilities, along with the really great technology that the Jeli team has built will, in fact, allow us to accelerate the use of Jeli, and that will be positive to us from a sales perspective.
Anushtha Mittal: Got it. That’s helpful. And then one more. On fiscal ’25, I know you’re not providing official guidance on it yet. But can you provide any guide post or building blocks we should think — we should keep in mind as we think about next year’s model?
Howard Wilson: Yes. Sure, Anushtha. So, we’re not providing guidance yet as you say, but this is how I would think about it. We’re expecting to exit Q4 with trailing 12-month billings at around 10%. So I think that’s a good place — a good starting point for you in terms of thinking about modeling. With the increase in demand that we’re seeing and the improvement that we expect to see both in terms of our own execution, we are expecting ARR growth to accelerate over the year. So, we will end up at a higher ARR growth rate exiting next year to where we are ending this year. So that’s how we think about it from a revenue modeling, a modest improvement over that period of time. But we would certainly look as well to continue to expand our operating margins, not at 1,000 basis points a year, but certainly looking to continue the path of expanding our margins.
Tony Righetti: Okay, team. I think that does it for us close with questions. Jennifer, will turn it back over to you for any final comments, please.
Jennifer Tejada: Sure. Well, I just want to thank you all for joining us today and remind you that we continue to be focused on the long term, building a durable, profitable growth company. We’re incredibly excited about the operations cloud opportunity and confident in our ability to execute. So thank you all for joining us, and have a great day.
