investor presentation | seeking alpha

Investor

Presentation

September 2021

Q2 FY22

Proprietary & Confidential


Safe harbor

This presentation contains forward-looking statements. All statements other than statements of

historical fact contained in this presentation, including statements as to future results of operations and

financial position, growth prospects and future revenue, planned products and services, business

strategy and plans, objectives of management for future operations of PagerDuty, Inc. (“PagerDuty” or

the “Company”), market size and growth opportunities, competitive position and technological and

market trends, are forward-looking statements. In some cases, you can identify forward-looking

statements by terms such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,”

“goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall” or the

negative of these terms or other similar words. You should not rely upon-forward looking statements

as predictions of future events.

The outcome of events described in these forward-looking statements contained in this presentation is

subject to known and unknown risks, uncertainties, assumptions and other factors that may cause

PagerDuty’s actual results, performance or outcomes to differ materially from those expressed or

implied by such forward-looking statements, including: the effect of uncertainties related to the COVID-

19 pandemic on U.S. and global markets, our business, operations, revenue results, cash flow,

operating expenses, demand for our solutions, sales cycles, customer retention and our customers’

businesses; our ability to achieve and maintain future profitability; our ability to attract new customers

and retain and sell additional functionality and services to our existing customers; our ability to sustain

and manage our growth; our dependence on revenue from a single product; our ability to compete

effectively in an increasingly competitive market; and general market, political, economic, and business

conditions.

The forward-looking statements contained in this presentation are also subject to additional risks,

uncertainties, and factors, including those more fully described in PagerDuty’s filings with the Securities

and Exchange Commission, including its most recent Annual Report on Form 10-K.

Forward-looking statements represent PagerDuty’s management’s beliefs and assumptions only as of

the date such statements are made. PagerDuty undertakes no obligation to update any forward-

looking statements made in this presentation to reflect events or circumstances after the date of this

presentation or to reflect new information or the occurrence of unanticipated events, except as

required by law.

This presentation also contains estimates and other statistical data made by independent parties and

by the Company relating to market size and growth and other industry data. These data involve a

number of assumptions and limitations, and you are cautioned not to give undue weight to such

estimates. The Company has not independently verified the statistical and other industry data

generated by independent parties and contained in this presentation and, accordingly, it cannot

guarantee their accuracy or completeness. In addition, projections, assumptions and estimates of its

future performance and the future performance of the markets in which the Company competes are

necessarily subject to a high degree of uncertainty and risk due to a variety of factors. These and other

factors could cause results or outcomes to differ materially from those expressed in the estimates

made by the independent parties and by PagerDuty.

This presentation also includes certain non-GAAP financial measures. These non-GAAP financial

measures are in addition to, and not as a substitute for or superior to measures of financial

performance prepared in accordance with GAAP. There are a number of limitations related to the use

of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other

companies may calculate non-GAAP financial measures differently or may use other measures to

evaluate their performance, all of which could reduce the usefulness of the Company’s non-GAAP

financial measures as tools for comparison. The Company has provided a reconciliation of those

measures to the most directly comparable GAAP measures, which is available in the appendix.

For further information with respect to PagerDuty, we refer you to our most recent Annual Report on

Form 10-K filed with the SEC. In addition, we are subject to the information and reporting

requirements of the Securities Exchange Act of 1934 and, accordingly, file periodic reports, current

reports, proxy statements and other information with the SEC. These periodic reports, current reports,

proxy statements and other information are available for review at the SEC’s website at

http://www.sec.gov.

Company Overview


1Automation to Everything with Rundeck + PagerDuty2As of the 12-months ended July 31, 2021 3As of the period ended July 31, 2021

>14,100Paying Customers

126%Net dollar-based retention

>95%Renewal rate

$36B+Total addressable market1

~25%Total Revenues from International

$277mTTM Billings2

795%3 year customer ROI

>65%Fortune 1003

>850KUsers on the Platform

The Operations Cloud for Modern Enterprise

Deliver FlexibilityConnect EveryoneConnect Everything and Automate Everything

Expansion into the TAM

Growth Levers at Play

PagerDuty at a glance


Our vision - The Operations Cloud

Incident Response

Full Service Ownership and DevOps

EcosystemReal-time Collaboration and

CommunicationCustomer

Service Ops

Connect Everyone

Automate Everything

Connect Everything

Deliver Flexibility

AIOps


Expanding total addressable market

On-Call Automation

Incident Management

Automation

$22B

$25B+$3B

$36B +$11B

Note: Represents the product of the sum of our average sales prices for our products multiplied by our estimate of the total number of potential users or customers of our products.

— Live Call Routing

— Automated Escalations

— Dynamic Alerting and Mobile Mgmt.

— On-Call Scheduling

— Platform integrations

— Real Time Collaboration Tools

— Real Time Visibility

— Response Orchestration

— Service Request Automation

— Security & Compliance Automation

— Runbook Automation

— Incident Response Automation

AIOps— Event Inference and Root Cause

— Event Enrichment, e.g. Remediation Recommendations

— Anomaly Detection

— Event Correlation, e.g. Noise Reduction


Multi-product land and expand (new SKUs, new revenue)

Accelerate growth in new markets(International, Federal, Partners)

Expanding to adjacencies, new use cases(Customer Service, Security Ops)

Extend our lead in Enterprise (across verticals and geographies)

Growth levers


Digital Acceleration

With significant tailwinds driving continued growth

Key drivers of digital transformation

Cloud Migration

DevOps Transformation


Future of work plays to PagerDuty strengths

1 Source: Gartner, Post-COVID-19 Future of Work Trends and Talent Implications, Human Resources Research Team, 20 July 2020

Trends PagerDuty

48% Employees working remotely vs. 30% pre-pandemic1 Built for distributed teams

Increase in organization complexity1 Built for complexity

Adopting frameworks and tools for remote, diversified teams i.e. artificial intelligence, machine learning and automation

Built for real-time


“If you don’t have availability, you don’t

have a customer experience. If you’re

not using PagerDuty, you’re missing

the boat.”

Andy JassyCEO Amazon, September 2020


Central nervous system for the digital enterprise

Real Time Work Broad Ecosystem OrchestrationService

OwnershipEvent Intelligence,

Automation, and Analytics

Development

ITOps

Security

Business & IoT

Cloud

Monitoring

Support

ChatOps & Collaboration


Foundation

Service Directory

DevOps Critical Event Management

Security Incident Response

Digital Operations for Customer Service Teams

Use Cases

Products

AutomationIntelligent Event Management

Scale Data and ML

Ecosystem

AIOps

Collaboration & Communication

On-Call Management and Incident Response

Service Intelligence

Recommendation Engine

Customer Service Ops

Multi-product and use case platform

Extensible Platform API


Expanding platform through innovation

1Connect EveryoneFull Service Ownership

– Service Graph

– Refresh Service Create

2Connect EverythingAIOps - Event Intelligence

– Change Correlation

– Incident Outliers

3 4Automate EverythingRunbook Automation

– PagerDuty Runbook Actions

Deliver FlexibilityCustomer Service Ops

– Customer Service Ops Business Plan

– PagerDuty App For SFDC Service Cloud

– Round Robin Workflows


Why PagerDuty wins - fast time to value

Integrations

Technology Customer focus

AI / Machine Learning

Automation

795% 3-year ROI

77% Reduced time to

troubleshoot issues

2 monthsTo payback

74% Reduction in

unplanned downtime

85% Reduced time to identify troubleshooting issues

24/7 availability Enterprise Scale Easy setup

Source: IDC Business Value Research, sponsored by PagerDuty, “PagerDuty Helps Organizations Optimize Their Digital Operations Management to Create Better Value,” January 2021

Driving value for customers

Proprietary & Confidential1As of July 31, 2021

Tech & Telco

Financial Retail Healthcare Media & EntertainmentTravel &

HospitalityIndustrial &

Manufacturing

~18,000 companies | > 14,100 paying customers | > 65% of Fortune 1001 | > 45% of Fortune 5001


Social impact and inclusion, diversity and equity

ESG & Materiality AssessmentEstablished ESG Committee & completed initial materiality assessment

Annual Diversity ReportPublished September 2020

Annual Social Impact ReportPublished March 2021

Supports organizations taking real–time action for good

95 out of 841Sustainalytics Software & Services Industry Group ESG Risk Rating1

Pledge 1%To accelerate change in local and global communities

Notes: 1. https://www.sustainalytics.com/esg-rating/pagerduty-inc/2003294890 September 2, 2021.

https://www.sustainalytics.com/esg-rating/pagerduty-inc/2003294890


Building blocks of growth on path to $1Bn

Market Expansion

InternationalFrom ~25% to over 30%

of Revenue

FederalVertical growing

> 35% CAGR (3y) demand signal for future growth

PartnersFrom < 10% to > 25% of

new business nnARR

Multi-Product

New product attach Grow to > 20% in MM> 30% in Enterprise

AIOps w/ Automation Grow to > 20%

of Revenue

Adjacencies

Accelerate our early success in

Customer ServiceSecurity Ops

Business use cases

Extend our lead in EnterpriseLarge Enterprise opportunity across DevOps and ITOps


Multi-product - new product momentum in enterprise & mid-market

Enterprise Customers Enterprise + Mid-Market Customers


Expanding to new markets - international

International EMEA

41%

20% 19%

16% 15%

Q2 FY22 YoY Revenue Growth1

Paid Customer 2-year CAGR

(ENT + MM) 2

Total Paid Customer 2-year CAGR 2

42%

1 Includes Rundeck2 Excludes Rundeck


New use case adoption reaching new teams

Increasing Number of Customers Using PagerDuty for Customer Service and Security

Content locked

New teams are using PagerDuty in Customer Service and Security

User growth across Customer Service and Security above 50% on 2 yr CAGR


Leader in enterprise

*ARPC = Average Revenue Per Customer

Customers >$100K ENT ARR as % of Total ARR

WIP/Draft

Enterprise churn as a % of starting ARR is <5% per year over the last 2 years

Enterprise ARPC has increased from >$90k in Q2FY20 to > $115k in Q2FY22

# Customers % YoY Growth ARR % of ARR

51%

35%

36%

54%

55%

58%


We are early in enterprise

F100

Since IPO <50% to >65%

<1% of employees¹ are PD users3

~14% of tech workers² in PD F100 customers are users3

(1) Employee data sourced from publicly available databases(2) Tech workers count based on information shared by companies on LinkedIn(3) As of Q1 FY22

F500

Since IPO ~33% to >45%

<1% of employees1

are PD users3

~14% of tech workers2 in PD F500 customers are users3


The operations cloud for modern enterprise


Quarterly financials


Notes: 1. Non-GAAP; Refer to earnings press release for reconciliation of non-GAAP figures.

Highlights of Q2’22

Increased Momentum

126%Total Dollar Based Net Retention

Accelerated growth

33%Q2 YoY Growth

Predictable SaaS model

>98%Subscription Revenue

Best in class

>84%Non-GAAP Gross Margin1

Sticky

+95%Renewal Rate

Continued expansion

~18,000Companies

2626

Automation & AIOps

Ongoing tailwinds

Land and expand

Driving consistent growth

Total revenue

+33%


Tailwinds:

Digital acceleration

Cloud migration

DevOps transformation

Hybrid work

International revenue% of revenue for Q2’22

~25%

International revenue

U.S. revenue

U.S.


Success in enterprise

Notes: Period ended July 31 2021.

Content locked

Execution on go-to market strategy

Increased Enterprise DBNR vs. Q1 of >125%

ARR per customer increased each of the last 18 quarters

FY’22 GuidanceQuarterly DBNR 118-124%

Term contracts

87%Of Revenue

Enterprise DBNR

130%

RPO

45%YoY Growth

TTM Billings

30%YoY Growth


Non-GAAP OpexPercentages represent percentage of revenue

Investing for growth for Q2’22

29

S&M Summit and brand campaign investments

R&DProduct development

G&AOne-time non-recurring strategic consulting fees

Notes: Non-GAAP; Refer to earnings press release for reconciliation of non-GAAP figures.

S&M53%

R&D25%

G&A22%

Guidance


Guidance

Q3 FY 2022 FY 2022

Revenue $69m - $71m $273m - $276m

Non-GAAP EPS per share

$(0.09) - $(0.10) $(0.35) - $(0.39)

Operating margin (9%) - (11%)(10%) - (11%)

Thank you

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