PagerDuty, Inc. (NYSE:PD) Q4 2023 Earnings Call Transcript

And culturally, we’re seeing a greater acceptance around leveraging AI to make decisions that historically people made in a swivel chair talking to each other in an operation center. So all of those trends are kind of coming together for us.

Robert Oliver: That’s great. Thanks, Jen. Appreciate it. And then Howard, you guys are one of a very short list of our coverage companies that was able to put through a price increase last year. I think you guys are anniversarying, if I’m not mistaken, what the first half or maybe this coming quarter. Just anything to call out for us there. It sounds like it’s gone well in aggregate and how is the right way to think about it? Is it just straight up? Here’s your price increase or is this also an opportunity giving you guys an opportunity to talk about the platform in greater value that PagerDuty can deliver? Thanks guys.

Howard Wilson: Yes. Thanks, Rob. So I think there are a few elements to that. So last year, I think in the March timeframe now, just going back, we introduced a price increase that was essentially for new customers. And so there was new pricing that was provided to new customers. And existing customers were then subject to an annual renewal uplift. And of course, if they made a new purchase, then the starting point, if you like, for them would be the new pricing. So that pricing has been well received through the year. As with any pricing change, it creates like a discussion point for customers. But I think it’s now well embedded and well established. And I think what’s more interesting for us is that as we look to the future and as we add to the portfolio of products that create this Operations Cloud.

There’s more opportunity for customers to be able to expand their footprint with us and for us to be able to ensure that they’re using more of PagerDuty and reconsolidating some of the spend that’s sitting out there, and that’s really a great opportunity for us.

Robert Oliver: Thanks, again, guys. Appreciate it.

Operator: Okay. Rounding things out, we’re going to hear from Credit Suisse, I believe that’s Tim Jausovec, not Fred Lee.

Tim Pusnik-Jausovec: Hi, thank you. Yes, this is Tim on for Fred. Appreciate you taking my questions. First off, the midpoint of your Q1 revenue guidance implies $2 million sequential revenue growth, which is I believe the lowest sequential growth in Q1 you’ve seen since 2019. At the same time, your full-year guidance implies sequential revenue growth slightly above what you reported last year. So I was hoping you could walk us through the puts and takes of a relatively weaker Q1 guidance compared to a very healthy full-year guide, especially given the environment you’re operating in?

Howard Wilson: Sure. So I think the key thing to remember is that Q1 last year was particularly strong quarter for us. And as a result of that, the compare is a tougher compare. We have also just in thinking about the guidance that we’ve given for the full-year, we are looking at the most recent set of circumstances in terms of thinking about how that may play out within the early part of the year. And we’ve tried to incorporate our views on the macro across the full-year. So as we move through the year, it will €“ as we see those circumstances play out through the year, it does create a slightly different shift in the revenue through the period.

Tim Pusnik-Jausovec: And to be clear, are you assuming a recovery in the macro environment into the back half of the year in your guidance?

Howard Wilson: It’s a different set of compares, right? So in terms of the compare from like Q1, which was a very strong quarter last year versus say, Q3 or Q4 later in the year, the compare is of a different base in terms.