Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________

FORM 10-Q

_________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38856

PAGERDUTY, INC.

(Exact name of registrant as specified in its charter)

_________________________


Delaware						27-2793871
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

600 Townsend St., Suite 200

San Francisco, CA 94103

(844) 800-3889

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

_________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, $0.000005 par value

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The total number of shares of common stock outstanding as of May 29, 2024, was 95,600,016.

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PAGERDUTY, INC.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION


Item 1	Financial Statements (unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations	6
	Condensed Consolidated Statements of Comprehensive Loss	7
	Condensed Consolidated Statements of Stockholders’ Equity	8
	Condensed Consolidated Statements of Cash Flows	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3	Quantitative and Qualitative Disclosures about Market Risk	39
Item 4	Controls and Procedures	40

Part II - OTHER INFORMATION


Item 1	Legal Proceedings	41
Item 1A	Risk Factors	41
Item 2	Unregistered Sale of Equity Securities and Use of Proceeds	42
Item 5	Other Information	42
Item 6	Exhibits	42
	Signatures	44

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which statements involve substantial risk and uncertainties. All statements contained in this Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth and trends, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “potentially,” “likely,” “target,” and similar expressions are intended to identify forward-looking statements.

Forward-looking statements contained in this Form 10-Q include, but are not limited to, statements about our expectations regarding:

•the impact of an economic downturn or recession, rising inflation or significant market volatility in the global economy on our customers, partners, employees and business;

•trends in key business metrics, including number of customers and dollar-based net retention rate, and non-GAAP financial measures and their usefulness in evaluating our business;

•trends in revenue, cost of revenue, and gross margin;

•trends in operating expenses, including research and development, sales and marketing, and general and administrative expense, and expectations regarding these expenses as a percentage of revenue;

•our existing cash and cash equivalents and cash provided by sales of our subscriptions being sufficient to support working capital and capital expenditures for at least the next 12 months and our ability to meet longer-term expected future cash requirements and obligations, through a combination of cash flows from operating activities and available cash and short-term investment balances;

•our ability to effectively identify, acquire, and integrate complementary companies, technologies, and assets, including our ability to successfully integrate artificial intelligence and machine learning in our offerings;

•our ability to service the interest on our convertible notes and repay such notes, to the extent required;

•our efforts to maintain proper and effective internal controls;

•our ability to expand our operations and increase adoption of our platform internationally;

•our ability to stay abreast of new or modified laws and regulations that currently apply or become applicable to our business both in the United States and internationally; and

•other statements regarding our future operations, financial condition, and prospects and business strategies.

Such forward-looking statements are based on our expectations as of the date of this filing and are subject to a number of risks, uncertainties and assumptions, including, but not limited to, risks detailed in the “Risk Factors” section of this Form 10-Q and in our Annual Report on Form 10-K/A for the year ended January 31, 2024, filed with the SEC on March 18, 2024 (“Annual Report”). Readers are urged to carefully review and consider the various disclosures made in this Form 10-Q and in other documents we file from time to time with the Securities and Exchange Commission, or the SEC, that disclose risks and uncertainties that may affect our business. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the effect of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Form 10-Q may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

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You should not rely on forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or may not occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. In addition, the forward-looking statements in this Form 10-Q are made as of the date of this filing, and we do not undertake, and expressly disclaim any duty, to update any of these forward-looking statements for any reason after the date of this Form 10-Q or to conform these statements to actual results or revised expectations.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

PAGERDUTY, INC.

Condensed Consolidated Balance Sheets

(in thousands) (unaudited)


	As of April 30, 2024		As of January 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	382,541	$	363,011
Investments	210,242		208,178
Accounts receivable, net of allowance for credit losses of $1,142 and $1,382 as of April 30, 2024 and January 31, 2024, respectively	77,536		100,413
Deferred contract costs, current	19,612		19,502
Prepaid expenses and other current assets	17,045		12,094
Total current assets	706,976		703,198
Property and equipment, net	17,400		17,632
Deferred contract costs, non-current	24,532		25,118
Lease right-of-use assets	2,943		3,789
Goodwill	137,401		137,401
Intangible assets, net	29,467		32,616
Other assets	5,324		5,552
Total assets	$	924,043	$	925,306
Liabilities, redeemable non-controlling interest, and stockholders’ equity
Current liabilities:
Accounts payable	$	6,558	$	6,242
Accrued expenses and other current liabilities	12,893		15,472
Accrued compensation	28,609		30,239
Deferred revenue, current	219,571		223,522
Lease liabilities, current	5,498		6,180
Total current liabilities	273,129		281,655
Convertible senior notes, net	448,667		448,030
Deferred revenue, non-current	4,022		4,639
Lease liabilities, non-current	5,979		6,809
Other liabilities	4,209		5,280
Total liabilities	736,006		746,413
Commitments and contingencies (Note 10)
Redeemable non-controlling interest (Note 3)	14,004		7,293
Stockholders’ equity:
Common stock	—		—
Additional paid-in capital	794,842		774,768
Accumulated other comprehensive loss	(1,235)		(733)
Accumulated deficit	(569,574)		(552,435)
Treasury stock	(50,000)		(50,000)
Total stockholders’ equity	174,033		171,600
Total liabilities, redeemable non-controlling interest, and stockholders’ equity	$	924,043	$	925,306

See Notes to Condensed Consolidated Financial Statements

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PAGERDUTY, INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)


	Three Months Ended April 30,
	2024		2023
Revenue	$	111,172	$	103,246
Cost of revenue	19,343		17,936
Gross profit	91,829		85,310
Operating expenses:
Research and development	37,523		33,508
Sales and marketing	48,499		43,801
General and administrative	27,540		23,801
Total operating expenses	113,562		101,110
Loss from operations	(21,733)		(15,800)
Interest income	6,980		4,203
Interest expense	(2,148)		(1,334)
Other expense, net	(251)		(13)
Loss before (provision for) benefit from income taxes	(17,152)		(12,944)
(Provision for) benefit from income taxes	(193)		106
Net loss	$	(17,345)	$	(12,838)
Net loss attributable to redeemable non-controlling interest	(206)		(620)
Net loss attributable to PagerDuty, Inc.	$	(17,139)	$	(12,218)
Adjustment attributable to redeemable non-controlling interest	6,917		—
Net loss attributable to PagerDuty, Inc. common stockholders	$	(24,056)	$	(12,218)
Net loss per share, basic and diluted, attributable to PagerDuty, Inc. common stockholders	$	(0.26)	$	(0.13)
Weighted average shares used in calculating net loss per share, basic and diluted	92,876		91,522

See Notes to Condensed Consolidated Financial Statements

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PAGERDUTY, INC.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)


	Three Months Ended April 30,
	2024		2023
Net loss	$	(17,345)	$	(12,838)
Unrealized (loss) gain on investments	(564)		380
Foreign currency translation adjustments	62		(66)
Total comprehensive loss	$	(17,847)	$	(12,524)
Less comprehensive loss attributable to redeemable non-controlling interest:
Net loss attributable to redeemable non-controlling interest	(206)		(620)
Foreign currency translation adjustments attributable to redeemable non-controlling interest	—		4
Comprehensive loss attributable to redeemable non-controlling interest	(206)		(616)
Comprehensive loss attributable to PagerDuty, Inc.	$	(17,641)	$	(11,908)

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PAGERDUTY, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

(unaudited)


	Three Months Ended April 30, 2024
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Treasury Stock			Total Stockholders’ Equity
	Shares	Amount								Shares	Amount
Balances as of January 31, 2024	95,068,187	$	—	$	774,768	$	(733)	$	(552,435)	(2,331,002)	$	(50,000)	$	171,600
Issuance of common stock upon exercise of stock options	41,875	—		291		—		—		—	—		291
Vesting of restricted stock units, net of employee payroll taxes	489,663	—		(6,552)		—		—		—	—		(6,552)
Other comprehensive loss	—	—		—		(502)		—		—	—		(502)
Stock-based compensation	—	—		33,252		—		—		—	—		33,252
Adjustment to redeemable non-controlling interest	—	—		(6,917)		—		—		—	—		(6,917)
Net loss attributable to PagerDuty, Inc.	—	—		—		—		(17,139)		—	—		(17,139)
Balances as of April 30, 2024	95,599,725	$	—	$	794,842	$	(1,235)	$	(569,574)	(2,331,002)	$	(50,000)	$	174,033


	Three Months Ended April 30, 2023
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Treasury Stock			Total Stockholders’ Equity
	Shares	Amount								Shares	Amount
Balances as of January 31, 2023	91,178,671	$	—	$	719,816	$	(1,592)	$	(477,246)	—	$	—	$	240,978
Issuance of common stock upon exercise of stock options	519,852	—		4,332		—		—		—	—		4,332
Vesting of restricted stock units, net of employee payroll taxes	396,019	—		(8,820)		—		—		—	—		(8,820)
Other comprehensive income	—	—		—		314		—		—	—		314
Stock-based compensation	—	—		27,890		—		—		—	—		27,890
Net loss attributable to PagerDuty, Inc.	—	—		—		—		(12,218)		—	—		(12,218)
Balances as of April 30, 2023	92,094,542	$	—	$	743,218	$	(1,278)	$	(489,464)	—	$	—	$	252,476

See Notes to Condensed Consolidated Financial Statements

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PAGERDUTY, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Three Months Ended April 30,
	2024		2023
Cash flows from operating activities
Net loss attributable to PagerDuty, Inc. common stockholders	$	(24,056)	$	(12,218)
Net loss and adjustment attributable to redeemable non-controlling interest (Note 3)	6,711		(620)
Net loss	(17,345)		(12,838)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	5,292		4,725
Amortization of deferred contract costs	5,279		4,990
Amortization of debt issuance costs	608		455
Stock-based compensation	32,940		27,545
Non-cash lease expense	846		1,176
Other	(1,302)		(852)
Changes in operating assets and liabilities:
Accounts receivable	22,716		30,003
Deferred contract costs	(4,805)		(3,372)
Prepaid expenses and other assets	(4,813)		(2,207)
Accounts payable	268		(1,206)
Accrued expenses and other liabilities	(3,435)		(244)
Accrued compensation	(1,667)		(17,286)
Deferred revenue	(4,423)		(7,246)
Lease liabilities	(1,512)		(1,491)
Net cash provided by operating activities	28,647		22,152
Cash flows from investing activities
Purchases of property and equipment	(457)		(235)
Capitalized internal-use software costs	(1,092)		(1,072)
Purchases of available-for-sale investments	(50,065)		(39,085)
Proceeds from maturities of available-for-sale investments	46,556		48,955
Proceeds from sales of available-for-sale investments	2,237		—
Net cash (used in) provided by investing activities	(2,821)		8,563
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of stock options	291		4,751
Employee payroll taxes paid related to net share settlement of restricted stock units	(6,552)		(8,820)
Net cash used in financing activities	(6,261)		(4,069)
Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash	(115)		(60)
Net increase in cash, cash equivalents, and restricted cash	19,450		26,586
Cash, cash equivalents, and restricted cash at beginning of period	366,667		274,019
Cash, cash equivalents, and restricted cash at end of period	$	386,117	$	300,605
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents	$	382,541	$	300,605
Restricted cash in other long-term assets	3,576		—
Total cash, cash equivalents and restricted cash	$	386,117	$	300,605

Supplemental cash flow data:
Cash paid for income taxes	$	31	$	78
Cash paid for interest	$	3,069	$	—
Non-cash investing and financing activities:
Purchase of property and equipment, accrued but not yet paid	$	320	$	199
Stock-based compensation capitalized in internal use software	$	312	$	345
Unpaid bonus capitalized in internal use software	$	56	$	69

See Notes to Condensed Consolidated Financial Statements

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Description of Business and Basis of Presentation

Description of Business

PagerDuty, Inc. was incorporated under the laws of the state of Delaware in May 2010.

PagerDuty is a digital operations management platform that manages urgent and mission-critical work for a modern, digital business. PagerDuty collects data and digital signals from virtually any software-enabled system or device and leverages powerful machine learning to correlate, process, and predict opportunities and issues. Using incident response, event management, and automation, the Company brings together the right people with the right information so they can resolve issues and act on opportunities in minutes or seconds from wherever they are.

As used herein, “PagerDuty”, “we”, “our”, “the Company” and similar terms include PagerDuty, Inc., unless the context indicates otherwise.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated balance sheet as of January 31, 2024 was derived from the audited consolidated financial statements as of that date but does not include all of the information and notes required by GAAP for complete financial statements. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended January 31, 2024, included in the Annual Report.

The condensed consolidated financial statements include the results of the Company, its wholly-owned subsidiaries, and subsidiaries in which the Company holds a controlling interest. All intercompany balances and transactions have been eliminated in consolidation.

In the opinion of management, the information contained herein reflects all adjustments necessary for a fair statement of the Company’s financial position, results of operations and comprehensive loss, stockholders’ equity, and cash flows. The results of operations for the three months ended April 30, 2024 are not necessarily indicative of the results to be expected for the full year ending January 31, 2025 or for any other interim period, or for any future year.

The Company’s fiscal year ends on January 31. References to fiscal 2025, for example, refer to the fiscal year ending January 31, 2025.

Reclassification

Certain reclassifications of prior period amounts have been made in the Company’s condensed consolidated statements of operations to conform to the current period presentation. The Company has reclassified a portion of other income to the interest income line item on the accompanying condensed consolidated statements of operations. These reclassifications had no effect on the reported results of operations.

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make, on an ongoing basis, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. The Company’s most significant estimates and judgments involve the period of benefit for amortizing deferred contract costs, the determination of the fair value of acquired assets and assumed liabilities, stock-based compensation, redemption value of redeemable non-controlling interests, and estimates related to the Company’s revenue recognition, such as the assessment of performance obligations in the Company’s revenue arrangements and the fair value assigned to each performance obligation, among others. Management bases its estimates on historical experience and on various other assumptions which management believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

2. Summary of Significant Accounting Policies

Concentrations of Risk and Significant Customers

The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, available-for-sale investments, and accounts receivable. All of the Company’s cash equivalents and investments are invested in money market funds, United States (“U.S.”) Treasury securities, commercial paper, corporate debt securities, or U.S. Government agency securities that management believes to be of high credit quality. The Company’s cash, cash equivalents, and available-for-sale investments are spread across several different financial institutions.

No single customer accounted for more than 10% of the total accounts receivable balance as of April 30, 2024 or January 31, 2024. No single customer represented 10% or more of revenue for the three months ended April 30, 2024 or 2023.

Segment Information

The Company manages its operations and allocates resources as one operating segment. The Company’s chief operating decision maker (“CODM”) is its chief executive officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. Refer to Note 15, “Geographic Information” for information regarding the Company's long-lived assets and revenue by geography.

Related Party Transactions

Certain members of the Company’s Board of Directors serve as directors of, or are executive officers of, and in some cases are investors in, companies that are customers or vendors of the Company. The Company billed $4.0 million and $3.8 million to entities associated with related parties in the three months ended April 30, 2024 and 2023, respectively. The Company recognized $4.0 million and $3.2 million in accounts receivable associated with related parties as of April 30, 2024 and 2023, respectively. Other related party transactions were not material for the three months ended April 30, 2024 and 2023.

Significant Accounting Policies

There have been no significant changes to the Company’s significant accounting policies as compared to those described in the Annual Report.

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Restricted Cash

The Company has classified cash that is not available for use in its operations as restricted cash. Restricted cash consists primarily of collateral for letters of credit related to security deposits for the Company’s office facility lease arrangements. As of April 30, 2024 and January 31, 2024, the Company had restricted cash of $3.6 million and $3.7 million, respectively, all of which was classified as non-current.

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and requires retrospective application to all prior periods. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

In December 2023, the FASB issued Accounting Standard Update (“ASU”) No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

3. Redeemable Non-Controlling Interest

In May 2022, the Company established a joint venture, PagerDuty K.K. The Company obtained a 51% controlling interest and has consolidated the financial results of the joint venture.

The agreements with the non-controlling interest holders of PagerDuty K.K. contain redemption features whereby the interest held by the non-controlling interest holders is redeemable either (i) at the option of the non-controlling interest holders or (ii) at the option of the Company, both beginning on the tenth anniversary of the initial capital contribution. The balance of the redeemable non-controlling interest is reported at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest's share of earnings or losses and other comprehensive income or loss, or its redemption value, which is determined based on a prescribed formula derived from multiple metrics including the annual recurring revenue of PagerDuty K.K. The resulting changes in the estimated redemption amount are recorded with corresponding adjustments against additional paid-in-capital due to the absence of retained earnings. The carrying amount of the redeemable non-controlling interest is recorded on the Company's condensed consolidated balance sheets as temporary equity.

The following table summarizes the activity in the redeemable non-controlling interest for the periods indicated below:

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Balance at beginning of period	$	7,293	$	1,108
Net loss attributable to redeemable non-controlling interest	(206)		(620)
Adjustments to redeemable non-controlling interest	6,917		—
Foreign currency translation adjustments	—		4
Balance at end of period	$	14,004	$	492

4. Cash, Cash Equivalents, and Investments

Cash, cash equivalents, and investments consisted of the following:


	As of April 30, 2024		As of January 31, 2024
	(in thousands)
Cash and cash equivalents
Cash	$	50,282	$	55,736
Money market funds	325,781		305,283
Commercial paper	5,480		994
U.S. Treasury securities	998		998
Total cash and cash equivalents	$	382,541	$	363,011
Available-for-sale investments:
U.S. Treasury securities	$	56,683	$	50,036
Commercial paper	17,102		2,886
Corporate debt securities	108,484		131,259
U.S. Government agency securities	27,973		23,997
Total available-for-sale investments	$	210,242	$	208,178

The following tables summarize the Company’s investments’ adjusted cost, net unrealized gains (losses), and fair value by significant investment category as of April 30, 2024 and January 31, 2024. Gross realized gains or losses from sales of available-for-sale securities were not material for the three months ended April 30, 2024 and 2023.


	As of April 30, 2024
	Cost Basis		Unrealized Loss, Net		Estimated Fair Value
	(in thousands)
Available-for-sale investments:
U.S. Treasury securities	$	56,750	$	(67)	$	56,683
Commercial paper	17,128		(26)		17,102
Corporate debt securities	108,958		(474)		108,484
U.S. Government agency securities	28,069		(96)		27,973
Total available-for-sale investments	$	210,905	$	(663)	$	210,242

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)


	As of January 31, 2024
	Cost Basis		Unrealized Gain (Loss), Net		Estimated Fair Value
	(in thousands)
Available-for-sale investments:
U.S. Treasury securities	$	50,012	$	24	$	50,036
Commercial paper	2,887		(1)		2,886
Corporate debt securities	131,395		(136)		131,259
U.S. Government agency securities	23,983		14		23,997
Total available-for-sale investments	$	208,277	$	(99)	$	208,178

The following tables present the Company’s available-for-sale securities by contractual maturity date as of April 30, 2024 and January 31, 2024:


	As of April 30, 2024
	Cost Basis		Fair Value
	(in thousands)
Due within one year	$	168,837	$	168,389
Due between one to five years	42,068		41,853
Total	$	210,905	$	210,242


	As of January 31, 2024
	Cost Basis		Fair Value
	(in thousands)
Due within one year	$	155,423	$	155,158
Due between one to five years	52,854		53,020
Total	$	208,277	$	208,178

As of April 30, 2024, there were 109 securities in an unrealized loss position with an aggregate fair value of $204.8 million, of which 30 were in a continuous unrealized loss position for more than 12 months. The total unrealized loss related to the 30 securities was $0.1 million. As of January 31, 2024, there were 70 securities in an unrealized loss position with an aggregate fair value of $108.7 million, 33 of which were in a continuous unrealized loss position for more than 12 months. The unrealized loss related to the 33 securities was $0.2 million.

When evaluating investments for impairment, the Company reviews factors such as the extent to which fair value has been below cost basis, the financial condition of the issuer and any changes thereto, and the Company’s intent to sell, or whether it is more likely than not that the Company will be required to sell, the investment before recovery of the investment’s amortized cost. No impairment loss has been recorded on the securities included in the tables above, as the Company believes that any decrease in fair value of these securities is temporary and the Company expects to recover at least up to the initial cost of the investment for these securities. The Company has not recorded an allowance for credit losses, as the Company believes any such losses would be immaterial based on the high-grade credit rating for each of its marketable securities as of the end of each period.

5. Fair Value Measurements

The Company measures its financial assets and liabilities at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value, as follows:

Level 1—Valuations based on observable inputs that reflect quoted prices for identical assets or liabilities in active markets.

Level 2—Valuations based on inputs that are directly or indirectly observable in the marketplace.

Level 3—Valuations based on unobservable inputs that are supported by little or no market activity.

The following tables present information about the Company’s financial assets that are required to be measured or disclosed at fair value using the above input categories:


	As of April 30, 2024
	Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	325,781	$	—	$	—	$	325,781
U.S. Treasury securities	—		57,681		—		57,681
Commercial paper	—		22,582		—		22,582
Corporate debt securities	—		108,484		—		108,484
U.S. Government agency securities	—		27,973		—		27,973
Total	$	325,781	$	216,720	$	—	$	542,501
Included in cash equivalents							$	332,259
Included in investments							$	210,242


	As of January 31, 2024
	Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	305,283	$	—	$	—	$	305,283
U.S. Treasury securities	—		51,034		—		51,034
Commercial paper	—		3,880		—		3,880
Corporate debt securities	—		131,259		—		131,259
U.S. Government agency securities	—		23,997		—		23,997
Total	$	305,283	$	210,170	$	—	$	515,453
Included in cash equivalents							$	307,275
Included in investments							$	208,178

The Company’s assets that are measured by management at fair value on a recurring basis are generally classified within Level 1 or Level 2 of the fair value hierarchy.

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of April 30, 2024 and January 31, 2024, the Company’s Level 2 securities are measured at fair value and classified within Level 2 in the fair value hierarchy because the Company uses quoted market prices for similar instruments or nonbinding market prices that are corroborated by observable market data or alternative pricing sources and models using market observable inputs to determine fair value.

The carrying amounts of certain financial instruments, including cash held in banks, accounts receivable, and accounts payable approximate fair value due to their short-term maturities and are excluded from the fair value table above.

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Convertible Senior Notes

As of April 30, 2024, the estimated fair value of the Company’s outstanding 1.25% Convertible Senior Notes due 2025 (the “2025 Notes”) was approximately $54.4 million and the estimated fair value of the Company’s 1.50% Convertible Senior Notes due 2028 (the “2028 Notes” and, together with the 2025 Notes, the “Notes”) was approximately $402.3 million. The fair values were determined based on the quoted price for the Notes in an inactive market on the last trading day of the reporting period and are considered as Level 2 in the fair value hierarchy.

6. Property and Equipment, Net

Property and equipment, net, consisted of the following:


	As of April 30, 2024		As of January 31, 2024
	(in thousands)
Leasehold improvements	$	6,810	$	11,334
Computers and equipment	9,420		9,135
Furniture and fixtures	3,911		3,989
Capitalized internal-use software	19,718		18,257
Gross property and equipment (1)	39,859		42,715
Accumulated depreciation and amortization	(22,459)		(25,083)
Property and equipment, net	$	17,400	$	17,632

(1) Gross property and equipment includes construction-in-progress for leasehold improvements and capitalized internal-use software of $3.8 million and $4.2 million that had not yet been placed in service as of April 30, 2024 and January 31, 2024, respectively. The costs associated with construction-in-progress are not amortized until the asset is available for its intended use.

Depreciation and amortization expense was $2.0 million and $1.8 million for the three months ended April 30, 2024 and 2023, respectively.

7. Deferred Contract Costs

Deferred contract costs, which primarily consist of deferred sales commissions, were $44.1 million and $44.6 million as of April 30, 2024 and January 31, 2024, respectively. Amortization expense for deferred contract costs was $5.3 million and $5.0 million for the three months ended April 30, 2024 and 2023, respectively. There was no impairment charge related to the costs capitalized for the periods presented.

8. Leases

Operating Leases

The Company has entered into various non-cancellable operating leases for its office spaces with lease periods expiring between fiscal 2026 and fiscal 2029. The operating lease agreements generally provide for rental payments on a graduated basis and for options to renew, which could increase future minimum lease payments if exercised.

Lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

value of lease payments. The lease right-of-use assets also include any lease payments made and exclude lease incentives such as tenant improvement allowances.

The operating leases typically include non-lease components such as common-area maintenance costs. The Company has elected to include non-lease components with lease payments for the purpose of calculating lease right-of-use assets and liabilities, to the extent that they are fixed. Non-lease components that are not fixed are expensed as incurred as variable lease payments.

Leases with a term of one year or less are not recognized on our condensed consolidated balance sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

In June 2023, the Company entered into a sublease for a portion of the San Francisco office location. The sublease has a remaining lease term of less than one year from the sublease inception date. Sublease income, which is recorded as a reduction of rent expense, was not material for the three months ended April 30, 2024.

The following table presents information about leases on the condensed consolidated balance sheet.


	As of April 30, 2024		As of January 31, 2024
	(in thousands)
Assets
Lease right-of-use assets	$	2,943	$	3,789
Liabilities
Lease liabilities	5,498		6,180
Lease liabilities, non-current	5,979		6,809

As of April 30, 2024, the weighted average remaining lease term was 3.1 years and the weighted average discount rate used to determine the net present value of the lease liabilities was 3.8%.

The following table presents information about leases on the condensed consolidated statement of operations.


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Operating lease expense	$	829	$	1,358
Short-term lease expense	394		571
Variable lease expense	210		355

The following table presents supplemental cash flow information about the Company’s leases.


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	1,628	$	1,657

There were no impairment charges recorded in the three months ended April 30, 2024 or 2023.

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

9. Debt and Financing Arrangements

2025 Convertible Senior Notes

In June 2020, the Company issued an aggregate principal amount of $287.5 million of 2025 Notes in a private offering pursuant to an Indenture dated June 25, 2020 (the “2025 Indenture”).

The 2025 Notes are senior, unsecured obligations of the Company and accrue interest payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2021, at a rate of 1.25% per year. The 2025 Notes will mature on July 1, 2025, unless such notes are converted, redeemed or repurchased earlier. The 2025 Notes are convertible into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election in the manner and subject to the terms and conditions provided in the 2025 Indenture.

In October 2023, the Company paid $223.7 million to repurchase $230.0 million of aggregate principal amount of the 2025 Notes with a carrying value of $227.5 million, net of unamortized issuance costs of $2.6 million.

2028 Convertible Senior Notes

In October 2023, the Company issued an aggregate principal amount of $402.5 million of 2028 Notes in a private offering pursuant to an Indenture dated October 13, 2023 (the “2028 Indenture” and, together with the 2025 Indenture, the “Indentures”). The total net proceeds from the debt offering, after deducting initial purchasers’ discounts and debt issuance costs of $12.0 million, paid or payable by the Company were $390.8 million.

The 2028 Notes are senior, unsecured obligations of the Company and accrue interest payable semiannually in arrears on April 15 and October 15 of each year, beginning on April 15, 2024, at a rate of 1.50% per year. The 2028 Notes will mature on October 15, 2028, unless such notes are converted, redeemed or repurchased earlier. Upon conversion, the Company will pay cash up to the aggregate principal amount of the 2028 Notes to be converted and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, in respect to the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the 2028 Notes being converted, in the manner and subject to the terms and conditions provided in the 2028 Indenture.

Additional Terms of the Notes

Holders of the Notes may convert all or any portion of their Notes at their option at any time prior to the close of business on April 1, 2025, with respect to the 2025 Notes, or June 15, 2028, with respect to the 2028 Notes, only under the following circumstances:

•During any fiscal quarter commencing after the fiscal quarter ended October 31, 2020, with respect to the 2025 Notes, or the fiscal quarter ended January 31, 2024, with respect to the 2028 Notes (and only during such fiscal quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the relevant conversion price on each applicable trading day;

•During the five business day period after any ten consecutive trading day period (the measurement period) in which the “trading price” (as defined in the relevant Indenture) per $1,000 principal amount of such Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the relevant conversion rate on each such trading day;

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

•If the Company calls such Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or

•Upon the occurrence of specified corporate events, as noted in the Indenture.

On or after April 1, 2025, with respect to the 2025 Notes, or June 15, 2028, with respect to the 2028 Notes, until the close of business on the second scheduled trading day immediately preceding the relevant maturity date, holders of the Notes may convert all or any portion of their Notes at any time, regardless of the foregoing circumstances.

The initial conversion rate for the 2025 Notes is 24.95 shares of common stock per $1,000 principal amount of 2025 Notes, which is equivalent to an initial conversion price of approximately $40.08 per share of common stock. The initial conversion rate for the 2028 Notes is 36.56 shares of common stock per $1,000 principal amount of 2028 Notes, which is equivalent to an initial conversion price of approximately $27.35 per share of common stock. The conversion rate for the Notes is subject to adjustment under certain circumstances in accordance with the terms of the relevant Indenture, but will not be adjusted for accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, or if the Company delivers a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event or convert its notes called (or deemed called) for redemption during the related redemption period (as defined in the relevant Indenture), as the case may be.

The Company may not redeem the 2028 Notes prior to October 20, 2026. The Company may redeem for cash all or any portion of the Notes, at its option, with respect to the 2025 Notes, on a redemption date occurring on or after July 6, 2023 and prior to the 41st scheduled trading day immediately preceding the maturity date of the 2025 Notes, or with respect to the 2028 Notes, on a redemption date occurring on or after October 20, 2026 and prior to the 61st scheduled trading day immediately preceding the maturity date of the 2028 Notes, if the last reported sale price of the common stock has been at least 130% of the relevant conversion price for the Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2025 Notes or the 2028 Notes.

If the Company undergoes a fundamental change (as defined in the relevant Indenture), holders may require the Company to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The Indentures governing the Notes contain customary terms and covenants, including that upon certain events of default occurring and continuing, the trustee or the holders of at least 25% in aggregate principal amount of the outstanding 2025 Notes or 2028 Notes may declare the entire principal of all such 2025 Notes or 2028 Notes plus accrued and unpaid interest to be immediately due and payable.

Accounting for the Notes

The Company early adopted ASU 2020-06 “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” as of February 1, 2021 using the modified retrospective approach. As a result, the Notes are accounted for as a single liability measured at their amortized cost, as no other embedded features require bifurcation and recognition as derivatives. The Notes are classified as long-term liabilities as of April 30, 2024. Issuance costs are being amortized to interest expense over the contractual term of the Notes at an effective interest rate of 2.13% for the 2028 Notes and 1.91% for the 2025 Notes.

The net carrying amount of the Notes as of April 30, 2024 and as of January 31, 2024 was as follows:

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)


	As of April 30, 2024
	(in thousands)
	2025 Notes		2028 Notes		Total
Principal	$	57,500	$	402,500	$	460,000
Less: unamortized issuance costs	(464)		(10,869)		(11,333)
Net carrying amount	$	57,036	$	391,631	$	448,667


	As of January 31, 2024
	(in thousands)
	2025 Notes		2028 Notes		Total
Principal	$	57,500	$	402,500	$	460,000
Less: unamortized issuance costs	(597)		(11,373)		(11,970)
Net carrying amount	$	56,903	$	391,127	$	448,030

Interest expense recognized related to the Notes during the three months ended April 30, 2024 and 2023 is as follows:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Contractual interest expense	$	1,540	$	879
Amortization of debt issuance costs	608		455
Total interest expense related to the Notes	$	2,148	$	1,334

Capped Call Transactions

In connection with the offering of the 2025 Notes, the Company entered into privately negotiated capped call transactions (the “2025 Capped Calls”) with certain financial institution counterparties and in connection with the offering of the 2028 Notes, the Company entered into separate privately negotiated capped call transactions (the “2028 Capped Calls” and, together with the 2025 Capped Calls, the “Capped Calls”). The Capped Calls are generally intended to reduce or offset the potential dilution to the common stock upon any conversion of the 2025 Notes or the 2028 Notes, as applicable, with such reduction or offset, as the case may be, subject to a cap based on the cap price of such Capped Calls. For accounting purposes, the Capped Calls are separate transactions, and not part of the terms of the 2025 Notes or the 2028 Notes, as applicable. The Capped Calls are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $35.7 million incurred to purchase the 2025 Capped Calls and the cost of $55.1 million incurred to purchase the 2028 Capped Calls were each recorded as a reduction to additional paid-in capital in the accompanying condensed consolidated balance sheets. The Capped Calls will not be remeasured as long as they continue to meet the conditions for equity classification.

The 2025 Capped Calls each have an initial strike price of approximately $40.08 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2025 Notes. The 2025 Capped Calls have an initial cap price of $61.66 per share, subject to certain adjustments. The 2025 Capped Calls cover, subject to anti-dilution adjustments, approximately 7.2 million shares of our common stock. The 2025 Capped Calls are subject to automatic exercise over a 40 trading day period commencing on May 2, 2025, subject to earlier termination under certain circumstances and may be settled in cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election. The 2025 Capped Calls remain outstanding as of April 30, 2024.

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The 2028 Capped Calls each have an initial strike price of approximately $27.35 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2028 Notes. The 2028 Capped Calls have an initial cap price of $42.90 per share, subject to certain adjustments. The 2028 Capped Calls cover, subject to anti-dilution adjustments, approximately 14.7 million shares of our common stock. The 2028 Capped Calls are subject to automatic exercise over a 60 trading day period commencing on July 20, 2028, subject to earlier termination under certain circumstances and may be settled in cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election.

10. Commitments and Contingencies

Legal Matters

From time to time in the normal course of business, the Company may be subject to various claims and other legal matters arising in the ordinary course of business. The Company investigates these claims as they arise and accrues estimates for resolution of legal and other contingencies when losses are probable and estimable. The Company is not currently a party to any material legal proceedings nor is it aware of any pending or threatened litigation that could reasonably be expected to have a material adverse effect on its business, financial condition, results of operations, or cash flows.

Warranties and Indemnification

The Company has entered into service-level agreements with a portion of its customers defining levels of uptime reliability and performance and permitting those customers to receive credits if the Company fails to meet the defined levels of uptime. To date, the Company has not experienced any significant failures to meet defined levels of uptime reliability and performance as a result of those agreements and, as a result, the Company has not incurred or accrued any material liabilities related to these agreements in the financial statements.

In the ordinary course of business, the Company may agree to indemnify customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. As permitted under Delaware law, the Company has entered into indemnification agreements with its directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No demands have been made upon the Company to provide indemnification under such agreements, and there are no claims that the Company is aware of that could have a material effect on its consolidated balance sheets, consolidated statements of operations and comprehensive loss, or consolidated statements of cash flows.

11. Deferred Revenue and Performance Obligations

The following table presents the changes to the Company’s deferred revenue:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Deferred revenue, beginning of period	$	228,161	$	209,051
Billings	106,604		96,000
Revenue recognized	(111,172)		(103,246)
Deferred revenue, end of period	$	223,593	$	201,805

For the three months ended April 30, 2024 and 2023, the majority of revenue recognized was from the deferred revenue balances at the beginning of each quarter.

Transaction price allocated to the remaining performance obligations represents all future, non-cancelable contracted revenue that has not yet been recognized, inclusive of deferred revenue that has been invoiced and non-cancelable amounts that will be invoiced and recognized as revenue in future periods.

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Beginning in the first quarter of fiscal 2025, the Company now includes contracts with an original term of less than 12 months in this disclosure which comprised $135.0 million of remaining non-cancelable performance obligations as of April 30, 2024.

As of April 30, 2024, total remaining non-cancelable performance obligations under cloud-hosted and term-license software subscription contracts with customers was approximately $388.0 million. Of this amount, the Company expects to recognize revenue of approximately $273.4 million, or 70%, over the next 12 months with the balance to be recognized as revenue thereafter.

12. Common Stock and Stockholders’ Equity

Common Stock Repurchase

In October 2023, the Company repurchased a total of 2,331,002 shares of the Company’s common stock through open market purchases at an average per share price of $21.45 for a total repurchase price of $50.0 million. The cost of repurchased shares is recorded as Treasury Stock in the condensed consolidated balance sheets.

Equity Incentive Plan

The Company has adopted the 2019 Equity Incentive Plan (the “2019 Plan”). As of April 30, 2024 and January 31, 2024, the Company was authorized to grant up to 36,092,962 shares and 31,519,553 shares of common stock, respectively, under the 2019 Plan.

The Company currently uses authorized and unissued shares to satisfy stock award exercises and settlement of Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”). As of April 30, 2024 and January 31, 2024, there were 19,846,670 shares and 17,178,454 shares available for future issuance under the 2019 Plan, respectively.

Shares of common stock reserved for future issuance are as follows:


			April 30, 2024
Outstanding stock options and unvested RSUs and PSUs			15,595,062
Available for future stock option, RSU, and PSU grants			19,846,670
Available for Employee Stock Purchase Plan (“ESPP”)			4,297,539
Total common stock reserved at April 30, 2024			39,739,271

Stock Option Activity

Stock option activity is as follows:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
					(in thousands)
Outstanding at January 31, 2024	4,875,025	$	10.29	4.4 years	$	68,151
Granted	—	$	—
Exercised	(41,875)	$	6.94
Canceled	(12,289)	$	13.30
Outstanding at April 30, 2024	4,820,861	$	10.31	4.1 years	$	50,306
Vested as of April 30, 2024	4,718,085	$	9.88	4.0 years	$	50,064

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

No stock options were granted during the three months ended April 30, 2024 and 2023. The aggregate intrinsic value of stock options exercised during the three months ended April 30, 2024 and 2023 was $0.5 million and $12.1 million, respectively.

The intrinsic value for options exercised is the difference between the market value of the stock and the exercise price of the stock option at the date of exercise.

As of April 30, 2024, there was approximately $1.3 million of total unrecognized compensation cost related to unvested stock options granted under the 2019 Plan, which will be recognized over a weighted average period of 1.6 years.

Restricted Stock Units

A summary of the Company’s RSU activity and related information is as follows:


	Number of RSUs	Weighted Average Grant Date Fair Value Per Share
Outstanding at January 31, 2024	7,412,056	$	31.08
Granted	2,924,763	$	21.63
Vested	(783,267)	$	30.73
Forfeited or canceled	(342,977)	$	29.79
Outstanding at April 30, 2024	9,210,575	$	28.17

The fair value of RSUs is based on the fair value of the underlying shares on the date of grant. The Company accounts for forfeitures as they occur.

As of April 30, 2024, there was $239.1 million of unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted average period of 2.4 years based on vesting under the award service conditions.

Performance Stock Units

The Company grants PSUs to certain employees of the Company for which the ultimate number of units that will vest are determined based on the achievement of market and/or performance conditions at the end of the stated performance period.

The Company grants PSUs to certain employees of the Company, which are to vest based on the level of achievement of a Company target related to PagerDuty’s operating plan and the relative growth of the per share price of the Company’s common stock as compared to the S&P Software & Services Select Index over the one-year performance period. The PSUs vest over a three-year period, subject to continuous service with the Company. The number of shares of the Company’s common stock that will vest based on the performance and market conditions can range from 0% to 200% of the target amount. Compensation expense for PSUs with performance conditions is measured using the fair value at the date of grant, and may be adjusted over the vesting period based on interim estimates of performance against the performance condition. Compensation expense for PSUs with market conditions is measured using a Monte Carlo simulation approach. Expense is recorded over the vesting period under the graded-vesting attribution method.

In the three months ended April 30, 2024, the Compensation Committee of the Board certified the results of PagerDuty’s operating plan and relative growth of the per share price of the Company’s common stock as compared to the S&P Software & Services Select Index for the fiscal year ended January 31, 2024. Based on the results, the PSUs granted in April 2023 (“2023 PSU Awards”) were cancelled as the target was not met.

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

A summary of the Company’s PSU activity and related information is as follows:


	Number of PSUs	Weighted Average Grant Date Fair Value Per Share
Outstanding at January 31, 2024	541,992	$	35.08
Granted(1)	781,813	$	21.62
Vested	(9,050)	$	41.17
Forfeited or canceled	(3,280)	$	41.88
Performance adjustment for 2023 PSU Awards	(529,662)	$	34.98
Outstanding at April 30, 2024	781,813	$	28.14
(1)This amount represents awards granted at 100% attainment.

During the three months ended April 30, 2024, the Company recorded stock-based compensation expense for the number of PSUs considered probable of vesting based on the attainment of the performance targets.

As of April 30, 2024, total unrecognized stock-based compensation cost related to PSUs was $19.4 million. This unrecognized stock-based compensation cost is expected to be recognized using the accelerated attribution method over a weighted-average period of approximately 1.6 years.

Employee Stock Purchase Plan

The Company’s ESPP generally provides for 24-month offering periods beginning June 15 and December 15 of each year, with each offering period consisting of four six-month purchase periods. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s stock as of the beginning of the offering period or (2) the fair market value of the Company’s stock on the purchase date, as defined in the ESPP.

During the three months ended April 30, 2024 and 2023, the Company recognized $1.7 million and $1.8 million, respectively, of stock-based compensation expense related to the ESPP.

During the three months ended April 30, 2024 and 2023, the Company withheld $3.1 million and $3.7 million, respectively, in contributions from employees.

During the three months ended April 30, 2024 and 2023, there were no purchases related to the ESPP.

Stock-Based Compensation

Stock-based compensation expense included in the Company’s condensed consolidated statements of operations is as follows:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Cost of revenue	$	1,756	$	1,876
Research and development	11,222		10,101
Sales and marketing	7,947		5,951
General and administrative	12,015		9,617
Total	$	32,940	$	27,545

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

13. Net Loss per Share

Net loss used for the purpose of determining basic and diluted net loss per share is determined by taking net loss attributable to PagerDuty, Inc., less the redeemable non-controlling interests redemption value adjustment.

The following table presents the calculation of basic and diluted net loss per share attributable to PagerDuty, Inc. common stockholders:


	Three Months Ended April 30,
	2024		2023
	(in thousands, except per share data)
Numerator:
Net loss attributable to PagerDuty, Inc. common stockholders	$	(17,139)	$	(12,218)
Adjustment attributable to redeemable non-controlling interest	6,917		—
Net loss attributable to PagerDuty, Inc. common stockholders	(24,056)		(12,218)
Denominator:
Weighted average shares used in calculating net income (loss) per share, basic and diluted	92,876		91,522
Net loss per share, basic and diluted, attributable to PagerDuty, Inc. common stockholders	$	(0.26)	$	(0.13)

Since the Company was in a loss position for the periods presented, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential common stock outstanding would have been anti-dilutive.

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:


	As of April 30,
	2024	2023
	(in thousands)
Shares subject to outstanding common stock awards	14,813	15,674
Restricted stock issued to acquire key personnel	25	63
Shares issuable pursuant to the ESPP	267	295

Additionally, as of April 30, 2023, using the conversion rate of 24.9507 shares of common stock per $1,000 principal amount of notes, the potentially dilutive shares that were not included in the diluted per share calculations related to the 2025 Notes was 7.2 million.

In October 2023, the Company provided written notice to the trustee and the note holders of the 2025 Notes that it had irrevocably elected to settle the principal amount of its convertible senior notes in cash and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, in respect to the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the 2025 Notes being converted. As described in Note 9, “Debt and Financing Arrangements,” upon conversion of the 2028 Notes, the Company will pay cash up to the aggregate principal amount of the 2028 Notes to be converted and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, in respect to the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the 2028 Notes being converted. As of April 30, 2024, the conversion options of the 2028 Notes were out of money and as a result, there were no potentially dilutive shares related to the conversion of the Notes.

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PAGERDUTY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

14. Income Taxes

The Company's provision for income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period.

The Company's quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income (or loss) relates, changes in how the Company does business, and tax law developments. The Company's estimated effective tax rate for the year differs from the U.S. statutory rate of 21% as a result of our U.S. losses for which no benefit will be realized, our foreign operations which are subject to tax rates that differ from those in the U.S., as well as the benefit for non-U.S. income tax credits.

The Company recorded an income tax provision of $0.2 million and an income tax benefit of $0.1 million for the three months ended April 30, 2024 and 2023, respectively.

15. Geographic Information

Revenue by location is generally determined by the billing address of the customer. The following table sets forth revenue by geographic area:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
United States	$	80,792	$	74,834
International	30,380		28,412
Total	$	111,172	$	103,246

Other than the United States, no other individual country accounted for 10% or more of revenue for the three months ended April 30, 2024 or 2023.

As of April 30, 2024, 71% of the Company’s long-lived assets, including property and equipment and right-of-use lease assets, were located in the United States, 22% were located in Canada, 5% were located in Portugal, and 2% were located in the United Kingdom.

As of January 31, 2024, 73% of the Company’s long-lived assets, including property and equipment and right-of-use lease assets, were located in the United States, 20% were located in Canada, 4% were located in Portugal, 2% were located in the United Kingdom and 1% were located in Chile.

16. Subsequent Event

On May 30, 2024, the Company’s Board of Directors authorized a share repurchase program for the repurchase of shares of the Company’s common stock, in an aggregate amount of up to $100.0 million (the “Share Repurchase Program”). Share repurchases under the Share Repurchase Program may be made from time to time on the open market, pursuant to Rule 10b5-1 trading plans, or other legally permissible means. The Share Repurchase Program has a term of 24 months and does not obligate the Company to acquire a specified number of shares, and may be suspended, modified, or terminated at any time, without prior notice. The number of shares to be repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes thereto included in Part I, Item 1 of this Quarterly Report and with our audited financial statements and related notes in our Annual Report on Form 10-K for the year ended January 31, 2024. You should review the sections titled “Special Note Regarding Forward-Looking Statements” above in this Form 10-Q for a discussion of forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, adverse effects on our business and general economic conditions as identified below, and those discussed in the section titled “Risk Factors” included in our Annual Report. The last day of our fiscal year is January 31. Our fiscal quarters end on April 30, July 31, October 31 and January 31.

Overview

PagerDuty is a global leader in digital operations management, enabling customers to achieve operational efficiency at scale and transform critical work for modern enterprises. The PagerDuty Operations Cloud combines AIOps, Automation, Incident Management and Customer Service Operations into a flexible, resilient and scalable platform to increase innovation velocity, protect revenue, reduce cost, and mitigate the risk of operational failure.

Today, nearly every business is a digital business. As such, organizations are under pressure to enhance their digital operations in order to meet escalating customer expectations, resolve incidents proactively and free up time for innovation projects. This means critical, time sensitive, and unpredictable work needs to be detected and orchestrated.

We collect data and digital signals from virtually any software-enabled system or device and leverage powerful machine learning to correlate, process, and predict opportunities and incidents. Using incident management, process automation, AI operations and customer service operations, we bring together the right people with the right information so they can resolve issues and act on opportunities in minutes or seconds from wherever they are.

Since our founding in 2009, we have expanded our capabilities from a single product focused on on-call management for developers to a multi-product platform that crosses silos into IT infrastructures and operations, security, customer service, and executive stakeholder roles across the organization. We have evolved from an on-call tool into the platform for digital operations, which resides at the center of a company’s technology ecosystem.

We have spent more than a decade building deep product integrations to our platform, and our ecosystem now includes over 700 direct integrations to enable our customers to gather and correlate digital signals from virtually any software-enabled system or device. This allows technical teams to collect digital signals from any system or platform in their environment, and without the effects of context switching. Those same integrations connect with popular collaboration tools and business applications, as well as all types of technology stacks to drive automation of work.

We generate revenue primarily from cloud-hosted subscription fees. We also generate revenue from term-license software subscription fees. PagerDuty has a land-and-expand business model that leads to viral adoption of our products and subsequent expansion. An increasing focus for our go-to-market motion, including our field sales team, is serving enterprise customers. Our mid-market and enterprise customers account for the majority of our revenue today. These teams drive expansion to additional users, new use cases, and add-on products, as well as upsell to higher value plans. The PagerDuty field organization is focused on selling the PagerDuty platform across IT, DevOps, and customer service operations teams.

Macroeconomic Environment

Our business and financial performance may be subject to the effects of the worldwide macroeconomic conditions, including, but not limited to global inflation and the rise in interest rates, existing and new laws and

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regulations, recession or economic downturn globally or in the jurisdictions in which we do business, health epidemics or pandemics, volatility in foreign currency exchange rates, and bank failures.

We continuously monitor geopolitical conflicts around the world and their effects on our business. While we do not believe the ongoing Russia-Ukraine conflict or the conflict in Israel and the surrounding areas will have a material impact on our business and results of operations, our business and results of operations could be materially impacted if these conflicts continue or worsen, leading to greater global economic disruptions and uncertainty. Our customers in regions impacted by conflict represented an immaterial portion of our net assets and total consolidated revenue both as of and for the three months ended April 30, 2024 and 2023.

We will continue to monitor the direct and indirect impacts of these or similar circumstances on our business and financial results. For additional information on the potential impact of macroeconomic conditions on our business, see Item 1A, “Risk Factors”.

Key Business Metrics

We review the following key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.

While these numbers are based on what we believe to be a reasonable representation of our customer base for the applicable period of measurement, we rely on a third party to validate legal entities, which uses the best available data at period end, and therefore is subject to change as new information becomes available. In addition, we are continually seeking to improve our methodology, which may result in future changes to our key metrics.

Our key metrics include the results of Jeli, Inc. (“Jeli”) to the extent applicable, beginning on the acquisition date of November 15, 2023.

Number of Customers

We believe that the number of customers using our platform, particularly those that have subscription agreements for more than $100,000 in annual recurring revenue (“ARR”), are indicators of our market penetration, particularly within enterprise accounts, the growth of our business, and our potential future business opportunities. We define ARR as the annualized recurring revenue of all active contracts at the end of a reporting period. We define a customer as a separate legal entity, such as a company or an educational or government institution, that has an active subscription with us or one of our partners to access our platform. In situations where an organization has multiple subsidiaries or divisions, we treat the parent entity as the customer instead of treating each subsidiary or division as a separate customer. Increasing awareness of our platform and its broad range of capabilities, coupled with the fact that the world is always on and powered by increasingly complex technology, has expanded the diversity of our customer base to include organizations of all sizes across virtually all industries. Over time, enterprise and mid-market customers have constituted a greater share of our revenue.


	As of April 30,
	2024	2023
Customers	15,120	15,089
Customers greater than $100,000 in ARR	811	764

Dollar-based Net Retention Rate

We use dollar-based net retention rate to evaluate the long-term value of our customer relationships, since this metric reflects our ability to retain and expand the ARR from our existing customers. Our dollar-based net retention rate compares our ARR from the same set of customers across comparable periods.

We calculate dollar-based net retention rate as of a period end by starting with the ARR from the cohort of all customers as of 12 months prior to such period end (“Prior Period ARR”). We then calculate the ARR from these

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same customers as of the current period end (“Current Period ARR”). Current Period ARR includes any expansion and is net of downgrades or churn over the last 12 months but excludes ARR from new customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the dollar-based net retention rate.


	Last 12 Months Ended April 30,
	2024		2023
Dollar-based net retention rate for all customers	106	%	116	%

Components of Results of Operations

Revenue

We generate revenue primarily from cloud-hosted software subscription fees with the majority of our revenue derived from such arrangements. We also generate revenue from term-license software subscription fees. Our subscriptions are typically one year in duration but can range from monthly to multi-year. Subscription fees are driven primarily by the number of customers, the number of users per customer, and the level of subscription purchased. We generally invoice customers in advance in annual installments for subscriptions to our software. Revenue related to our cloud-hosted software subscriptions is recognized ratably over the related contractual term beginning on the date that our platform is made available to a customer. For our term-license software subscriptions, we recognize license revenue upon delivery and software maintenance revenue ratably, typically beginning on the start of the contractual term of the arrangement.

Due to the low complexity of implementation and integration of our platform with our customers’ existing infrastructure, revenue from professional services has been immaterial to date.

Cost of Revenue

Cost of revenue primarily consists of expenses related to providing our platform to customers, including personnel expenses for operations and global support, payments to our third-party cloud infrastructure providers for hosting our software, payment processing fees, amortization of capitalized internal-use software costs, amortization of acquired developed technology, and allocated overhead costs for facilities, information technology, and other allocated overhead costs. We will continue to invest additional resources in our platform infrastructure and our customer support and success organizations to expand the capability of our platform and ensure that our customers are realizing the full benefit of our offerings. The level and timing of investment in these areas could affect our cost of revenue in the future.

Gross Profit and Gross Margin

Gross profit represents revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Our gross margin may fluctuate from period to period as our revenue fluctuates, and as a result of the timing and amount of investments to expand the capacity of our third-party cloud infrastructure providers and our continued efforts to enhance our platform support and customer success teams.

Operating Expenses

Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. Personnel expenses are the most significant component of operating expenses and consist of salaries, benefits, bonuses, stock-based compensation expense, and sales commissions. Operating expenses also include amortization of acquired intangible assets, acquisition-related expenses, allocated overhead costs for facilities, shared IT related expenses, including depreciation expense, and certain company-wide events and functions.

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Research and development

Research and development expenses consist primarily of personnel costs for our engineering, product, and design teams. Additionally, research and development expenses include outside services, depreciation of equipment used in research and development activities, acquisition-related expenses, and allocated overhead costs. We expect that our research and development expenses will increase in dollar value as our business grows.

Sales and marketing

Sales and marketing expenses consist primarily of personnel costs, costs of general marketing activities and promotional activities, travel related expenses, amortization of acquired intangible assets, allocated overhead costs, and bad debt expense. Sales commissions earned by our sales force that are considered incremental and recoverable costs of obtaining a subscription with a customer are deferred and amortized on a straight-line basis over the expected period of benefit, which we have determined to be four years. We expect that our sales and marketing expenses will generally increase in dollar value and continue to be our largest operating expense for the foreseeable future as we expand our sales and marketing efforts.

General and administrative

General and administrative expenses consist primarily of personnel costs and outside services fees for finance, legal, human resources, information technology, and other administrative functions. In addition, general and administrative expenses include non-personnel costs, such as legal, accounting, and other professional fees, hardware and software costs, certain tax, license and insurance-related expenses, acquisition-related expenses, and allocated overhead costs. We expect that our general and administrative expenses will increase in dollar value as our business grows. However, we expect that our general and administrative expenses will decrease as a percentage of our revenue over the longer term as we expect our investments to allow for improved efficiency for future growth in the business.

Interest Income

Interest income consists of accretion income and amortization expense on our available-for-sale investments and income earned on our cash and cash equivalents and interest earned on our short-term investments which consist of U.S. Treasury securities, commercial paper, corporate debt securities, and U.S. Government agency securities.

Interest Expense

Interest expense consists primarily of contractual interest expense and amortization of debt issuance costs on our 1.25% Convertible senior notes due 2025 that were outstanding in the three months ended April 30, 2023 and partially extinguished in October 2023. Interest expense for the three months ended April 30, 2024 also includes the contractual interest expense and amortization of debt issuance costs on our 1.50% Convertible Senior Notes due 2028 (the “2028 Notes”) that were issued in October 2023.

Other Income (Expense), Net

Other income (expense), net primarily consists of foreign currency transaction gains and losses.

(Provision for) Benefit from Income Taxes

(Provision for) benefit from income taxes consists primarily of income taxes in certain foreign jurisdictions in which we conduct business. We maintain a full valuation allowance on our net federal and state deferred tax assets as we have concluded that it is more likely than not that the deferred tax assets will not be realized for all years presented.

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Results of Operations

The following table sets forth our condensed consolidated statements of operations data for the periods indicated:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Revenue	$	111,172	$	103,246
Cost of revenue(1)	19,343		17,936
Gross profit	91,829		85,310
Operating expenses:
Research and development(1)	37,523		33,508
Sales and marketing(1)	48,499		43,801
General and administrative(1)	27,540		23,801
Total operating expenses	113,562		101,110
Loss from operations	(21,733)		(15,800)
Interest income	6,980		4,203
Interest expense	(2,148)		(1,334)
Other expense, net	(251)		(13)
Loss before (provision for) benefit from income taxes	(17,152)		(12,944)
(Provision for) benefit from income taxes	(193)		106
Net loss	$	(17,345)	$	(12,838)
Net loss attributable to redeemable non-controlling interest	(206)		(620)
Net loss attributable to PagerDuty, Inc.	$	(17,139)	$	(12,218)
Adjustment attributable to redeemable non-controlling interest	6,917		—
Net loss attributable to PagerDuty, Inc. common stockholders	$	(24,056)	$	(12,218)

______________

(1) Includes stock-based compensation expense as follows:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Cost of revenue	$	1,756	$	1,876
Research and development	11,222		10,101
Sales and marketing	7,947		5,951
General and administrative	12,015		9,617
Total	$	32,940	$	27,545

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The following table sets forth our condensed consolidated statements of operations data expressed as a percentage of revenue:


	Three Months Ended April 30,
	2024		2023
Revenue	100	%	100	%
Cost of revenue	17		17
Gross profit	83	%	83	%
Operating expenses:
Research and development	34		32
Sales and marketing	44		42
General and administrative	25		23
Total operating expenses	102		98
Loss from operations	(20)		(15)
Interest income	6		4
Interest expense	(2)		(1)
Other expense, net	—		—
Loss before (provision for) benefit from income taxes	(15)		(13)
(Provision for) benefit from income taxes	—		—
Net loss	(16)		(12)
Net loss attributable to redeemable non-controlling interest	—		(1)
Net loss attributable to PagerDuty, Inc.	(15)		(12)
Adjustment attributable to redeemable non-controlling interest	6		—
Net loss attributable to PagerDuty, Inc. common stockholders	(22)	%	(12)	%

__________

Note: Certain figures may not sum due to rounding.

Comparison of the Three Months Ended April 30, 2024 and 2023

Revenue


	Three Months Ended April 30,
	2024		2023		Change		% Change
	(dollars in thousands)
Revenue	$	111,172	$	103,246	$	7,926	8	%

Revenue increased by $7.9 million, or 8%, for the three months ended April 30, 2024 compared to the three months ended April 30, 2023. The increase in revenue was primarily attributable to a combination of growth from both new and existing customers. Growth from existing customers was driven by both increases in the number of users and upsell of additional products and services.

Cost of Revenue and Gross Margin


	Three Months Ended April 30,
	2024			2023			Change		% Change
	(dollars in thousands)
Cost of revenue	$	19,343		$	17,936		$	1,407	8	%
Gross margin	83		%	83		%

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Cost of revenue increased by $1.4 million, or 8%, for the three months ended April 30, 2024 compared to the three months ended April 30, 2023, primarily due to an increase of $0.8 million in outside services spend for the customer service team, an increase of $0.7 million in amortization of internally developed software, an increase of $0.3 million in amortization of acquired intangible assets, and an increase of $0.3 million in hosting, software, and telecom costs. This was offset by a decrease of $1.0 million in personnel costs as a result of changes in the components of compensation plans compared to the prior year.

Research and Development


	Three Months Ended April 30,
	2024			2023			Change		% Change
	(dollars in thousands)
Research and development	$	37,523		$	33,508		$	4,015	12	%
Percentage of revenue	34		%	32		%

Research and development expenses increased by $4.0 million, or 12%, for the three months ended April 30, 2024 compared to the three months ended April 30, 2023. The increase was primarily driven by an increase in personnel expenses of $3.5 million as a result of increased headcount and salaries to support our continued investment in our platform and an increase of $0.7 million in costs to support the business and related infrastructure, which include allocated overhead costs. This was offset by a $0.5 million decrease in outside services spend due to higher leverage of internal resources through hiring.

Sales and Marketing


	Three Months Ended April 30,
	2024			2023			Change		% Change
	(dollars in thousands)
Sales and marketing	$	48,499		$	43,801		$	4,698	11	%
Percentage of revenue	44		%	42		%

Sales and marketing expenses increased by $4.7 million, or 11%, for the three months ended April 30, 2024 compared to the three months ended April 30, 2023. This increase was primarily due to an increase of $1.8 million in personnel expenses driven by headcount growth, increased salaries, and amortization of deferred contract costs, an increase of $1.3 million in outside services, an increase of $0.9 million in training and travel-related costs, and an increase of $0.7 million in marketing costs.

General and Administrative


	Three Months Ended April 30,
	2024			2023			Change		% Change
	(dollars in thousands)
General and administrative	$	27,540		$	23,801		$	3,739	16	%
Percentage of revenue	25		%	23		%

General and administrative expenses increased by $3.7 million, or 16%, for the three months ended April 30, 2024 compared to the three months ended April 30, 2023. This increase was primarily due to a $2.8 million increase in personnel expenses driven by headcount growth and increased salaries and a $0.7 million increase in outside services.

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Interest Expense


	Three Months Ended April 30,
	2024		2023		Change		% Change
	(dollars in thousands)
Interest expense	$	2,148	$	1,334	$	814	61	%

Interest expense for the three months ended April 30, 2024 increased by $0.8 million, or 61%, for the three months ended April 30, 2024 compared to the three months ended April 30, 2023. The increase is primarily due to contractual interest and amortization of debt issuance costs for the 2028 Notes that were issued in October 2023. The increase was partially offset by a decrease in the amortization of debt issuance costs and interest for the 2025 Notes that were partially extinguished in October 2023 and therefore had less of an impact on the current period.

Interest Income and Other Expense, Net


	Three Months Ended April 30,
	2024		2023		Change		% Change
	(dollars in thousands)
Interest income	$	6,980	$	4,203	$	2,777	66	%
Other expense, net	$	(251)	$	(13)	$	(238)	(1,831)	%

Interest income increased by $2.8 million and other expense, net increased by $0.2 million for the three months ended April 30, 2024 compared to the three months ended April 30, 2023. The increase in interest income was primarily due to higher interest rates and accretion on our cash, cash equivalent and investment balances in the current year. The increase in other expense, net was due to changes in foreign currency rates.

Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance. We use the below referenced non-GAAP financial information, collectively, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their U.S. GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with U.S. GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by U.S. GAAP to be recorded in our financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by our management about which expenses are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S. GAAP.

Non-GAAP Gross Profit and Non-GAAP Gross Margin

We define non-GAAP gross profit as gross profit excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, and restructuring costs. We define non-GAAP gross margin as non-GAAP gross profit as a percentage of revenue.

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	Three Months Ended April 30,
	2024			2023
	(in thousands)
Gross profit	$	91,829		$	85,310
Add:
Stock-based compensation	1,756			1,876
Employer taxes related to employee stock transactions	44			72
Amortization of acquired intangible assets	2,407			2,087
Restructuring costs	—			137
Non-GAAP gross profit	$	96,036		$	89,482

Gross margin	83		%	83		%
Non-GAAP gross margin	86		%	87		%

Non-GAAP Operating Income and Non-GAAP Operating Margin

We define non-GAAP operating income as loss from operations excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, restructuring costs, and acquisition-related expenses, which include transaction costs, acquisition-related retention payments and asset impairment, which are not necessarily reflective of operational performance during a given period. We define non-GAAP operating margin as non-GAAP operating income as a percentage of revenue.


	Three Months Ended April 30,
	2024			2023
	(in thousands)
Loss from operations	$	(21,733)		$	(15,800)
Add:
Stock-based compensation	32,940			27,545
Employer taxes related to employee stock transactions	703			1,197
Amortization of acquired intangible assets	3,148			2,806
Acquisition-related expenses	263			161
Restructuring costs	8			144
Non-GAAP operating income	$	15,329		$	16,053

Operating margin	(20)		%	(15)		%
Non-GAAP operating margin	14		%	16		%

Non-GAAP Net Income Attributable to PagerDuty, Inc. Common Stockholders

We define non-GAAP net income attributable to PagerDuty, Inc. common stockholders as net loss attributable to PagerDuty, Inc. common stockholders excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of debt issuance costs, amortization of acquired intangible assets, acquisition-related expenses, which include transaction costs, acquisition-related retention payments and asset impairment, restructuring costs, adjustment attributable to redeemable non-controlling interest, and income tax adjustments, which are not necessarily reflective of operational performance during a given period.

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	Three Months Ended April 30,
	2024		2023
	(in thousands)
Net loss attributable to PagerDuty, Inc. common stockholders	$	(24,056)	$	(12,218)
Add (Less):
Stock-based compensation	32,940		27,545
Employer taxes related to employee stock transactions	703		1,197
Amortization of debt issuance costs	608		455
Amortization of acquired intangible assets	3,148		2,806
Acquisition-related expenses	263		161
Restructuring costs	8		144
Adjustment attributable to redeemable non-controlling interest	6,917		—
Income tax effects and adjustments	(4,526)		(792)
Non-GAAP net income attributable to PagerDuty, Inc. common stockholders	$	16,005	$	19,298

Free Cash Flow

We define free cash flow as net cash provided by operating activities, less cash used for purchases of property and equipment and capitalization of internal-use software costs. In addition to the reasons stated above, we believe that free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash in excess of our capital investments in property and equipment in order to enhance the strength of our balance sheet and further invest in our business and potential strategic initiatives. A limitation of the utility of free cash flow as a measure of our liquidity is that it does not represent the total increase or decrease in our cash balance for the period. We use free cash flow in conjunction with traditional U.S. GAAP measures as part of our overall assessment of our liquidity, including the preparation of our annual operating budget and quarterly forecasts and to evaluate the effectiveness of our business strategies. There are a number of limitations related to the use of free cash flow as compared to net cash provided by operating activities, including that free cash flow includes capital expenditures, the benefits of which are realized in periods subsequent to those when expenditures are made.


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Net cash provided by operating activities	$	28,647	$	22,152
Less:
Purchases of property and equipment	(457)		(235)
Capitalization of internal-use software costs	(1,092)		(1,072)
Free cash flow	$	27,098	$	20,845
Net cash (used in) provided by investing activities	$	(2,821)	$	8,563
Net cash used in financing activities	$	(6,261)	$	(4,069)

Liquidity and Capital Resources

As of April 30, 2024, our principal sources of liquidity were cash and cash equivalents and investments totaling $592.8 million. We believe that our existing cash and cash equivalents, investments, and net cash generated from our operating activities will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. Since inception, we have financed operations primarily through sales of our cloud-hosted software subscriptions, net proceeds received from sales of equity securities, and the issuance of our Notes.

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On June 25, 2020, we issued $287.5 million aggregate principal amount of the 2025 Notes in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The total net proceeds from the debt offering, after deducting the initial purchasers’ discounts and debt issuance costs of $9.3 million, and purchases of capped calls of $35.7 million, were $242.5 million.

On October 13, 2023, we issued $402.5 million aggregate principal amount of the 2028 Notes in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The total net proceeds from the debt offering, after deducting initial purchasers’ discounts and debt issuance costs of $12.0 million, and purchases of the Capped Calls of $55.1 million, were $390.4 million.

In October 2023, we entered into multiple privately negotiated purchase agreements with the holders of our 2025 Notes to repurchase $230.0 million in aggregate principal of the existing notes, resulting in cash payments of $223.7 million. In October 2023, we also repurchased $50.0 million in common stock through open market purchases.

We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities and available cash and short-term investment balances. Our future capital requirements will depend on many factors, including the effects of the worldwide macroeconomic conditions, including but not limited to, global inflation and the rise in interest rates, existing and new laws and regulations, recession or economic downturn globally or in the jurisdictions in which we do business, volatility in foreign currency exchange rates, our subscription growth rate, subscription renewal activity, including the timing and the amount of cash received from customers, the timing and extent of spending to support development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced product offerings, and the continuing market adoption of our platform. We may in the future enter into arrangements to acquire or invest in complementary businesses, services, and technologies. We may be required to seek additional equity or debt financing. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, operations, and financial condition.

A significant majority of our customers pay in advance for our cloud-hosted and term-license software subscriptions. Therefore, a substantial source of our cash is from our deferred revenue, which is included in the liabilities section of our condensed consolidated balance sheet. Deferred revenue consists of the unearned portion of customer billings, which is recognized as revenue in accordance with our revenue recognition policy. As of April 30, 2024, we had deferred revenue of $223.6 million, of which $219.6 million was recorded as a current liability and expected to be recorded as revenue in the next 12 months, provided all other revenue recognition criteria have been met.

Cash Flows

The following table shows a summary of our cash flows for the periods presented:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Net cash provided by operating activities	$	28,647	$	22,152
Net cash (used in) provided by investing activities	$	(2,821)	$	8,563
Net cash used in financing activities	$	(6,261)	$	(4,069)

Operating Activities

Our largest source of operating cash is cash collection from sales of our cloud-hosted and term license software subscriptions to our customers. Our primary uses of cash from operating activities are for personnel expenses, marketing expenses and hosting and software expenses. In the last several years, we have had periods in

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which we generated negative cash flows from operating activities and have supplemented working capital requirements through net proceeds from both private and public sales of equity securities and issuance of debt.

Cash provided by operating activities for the three months ended April 30, 2024 of $28.6 million primarily related to our net loss of $17.3 million, adjusted for non-cash charges and gains of $43.7 million and net cash inflows of $2.3 million due to changes in our operating assets and liabilities. Non-cash charges consisted of stock-based compensation of $32.9 million, amortization of our deferred contract costs of $5.3 million, depreciation and amortization of property and equipment, capitalized implementation costs, and acquired intangible assets of $5.3 million, non-cash lease expense of $0.8 million, and amortization of debt issuance costs of $0.6 million, offset by other net gains of $1.3 million, which consist primarily of accretion on investments. Changes in operating assets and liabilities reflected cash inflows from a $22.7 million decrease in accounts receivable due to timing of cash collections, offset by $4.8 million of additions to deferred contract costs due to commissions paid on new bookings in line with revenue growth, a $4.8 million increase in prepaid expenses and other assets related to timing of payments made in advance for future services, a $4.4 million decrease in deferred revenue resulting from decreased billings for subscriptions, a $3.4 million decrease in accrued expenses, $1.5 million in payments for operating lease liabilities, and a $1.4 million increase in accounts payable and accrued compensation.

Investing Activities

Cash used in investing activities for the three months ended April 30, 2024 of $2.8 million consisted primarily of purchases of available-for-sale investments of $50.1 million, capitalization of internal-use software of $1.1 million, and purchases of property and equipment of $0.5 million primarily for purchases of computers for new employees. This was offset by proceeds from maturities and sales of investments of $48.8 million.

Financing Activities

Cash used in financing activities for the three months ended April 30, 2024 of $6.3 million consisted of $6.6 million in employee payroll taxes paid related to vesting of restricted stock units offset by proceeds of $0.3 million from the exercise of stock options.

Contractual Obligations and Commitments

There were no material changes during the three months ended April 30, 2024 to our contractual obligations and other commitments, as disclosed in our Annual Report.

For further information on our commitments and contingencies, refer to Note 10, “Commitments and Contingencies” in the condensed consolidated financial statements contained within this Form 10-Q.

Indemnification Agreements

In the ordinary course of business, we may agree to indemnify customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by us, or from intellectual property infringement claims made by third parties. As permitted under Delaware law, we have entered into indemnification agreements with our directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No demands have been made upon us to provide indemnification under such agreements, and there are no claims that we are aware of that could have a material effect on our condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive income (loss), or condensed consolidated statements of cash flows.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements and the related notes thereto included elsewhere in this Form 10-Q are prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly

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from the estimates made by management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.

There have been no significant changes to our critical accounting policies described in Part II, Item 7 in our Annual Report, that had a material impact on our condensed consolidated financial statements and related notes.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in our market risk as compared to the disclosures in Part II, Item 7A in our Annual Report.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation and supervision of our chief executive officer and our chief financial officer, have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Form 10-Q. Based on such evaluation, our chief executive officer and chief financial officer have concluded that as of such date, our disclosure controls and procedures were, in design and operation, effective at a reasonable assurance level.

Limitations on the Effectiveness of Controls

The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended April 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any material pending legal proceedings. From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business.

Item 1A. Risk Factors

Our business involves significant risks, some of which are described below. You should carefully consider the following risks, together with all of the other information in this Form 10-Q, including our condensed consolidated financial statements and the related notes included elsewhere in this Form 10-Q. Any of the following risks could have an adverse effect on our business, results of operations, financial condition or prospects, and could cause the trading price of our common stock to decline. Our business, results of operations, financial condition or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material.

There have been no material changes to the Risk Factors described under “Part I—Item 1A. Risk Factors” in our Annual Report.

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Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Unregistered Sales of Equity Securities

None.

Items 3 and 4 are not applicable and have been omitted.

Item 5. Other Information

Rule 10b5-1 Trading Arrangements

On April 1, 2024, Elena Gomez, a member of our Board, adopted a trading plan for the sale of the Company’s common stock that is intended to satisfy the affirmative defense of Rule 10b5-1(c). The trading plan is set to expire on June 13, 2025 and provides for the sale of up to 15,244 shares of common stock, all of which are subject to the Company’s stock price reaching certain price thresholds.

On April 9, 2024, Jennifer Tejada, our Chief Executive Officer and a member of our Board, adopted a trading plan for the sale of the Company’s common stock that is intended to satisfy the affirmative defense of Rule 10b5-1(c). The trading plan was set to expire on June 27, 2025 and provided for the following transactions: (i) the exercise of up to 800,000 stock options and the sale of the underlying shares of common stock, subject to the Company’s stock price reaching certain price thresholds; and (ii) the sale of up to 102,509 shares of common stock, all of which are subject to the Company’s stock price reaching certain price thresholds.

On April 10, 2024, Owen Howard Wilson, our Chief Financial Officer, adopted a trading plan for the sale of the Company’s common stock that is intended to satisfy the affirmative defense of Rule 10b5-1(c). The trading plan is set to expire on June 27, 2025 and provides for the following transactions: the sale of up to 241,411 shares of common stock, all of which are subject to the Company’s stock price reaching certain price thresholds.

Item 6. Exhibits

The documents listed in the Exhibit Index of this Form 10-Q are incorporated by reference or are filed with this Form 10-Q, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K).

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EXHIBIT INDEX

Exhibit

Number

Description

Form

File No.

Incorporated by Exhibit Reference

Filing Date

3.1

Amended and Restated Certificate of Incorporation of PagerDuty, Inc.

8-K

001-38856

3.1

April 15, 2019

3.2

Amended and Restated Bylaws of PagerDuty, Inc.

8-K

001-38856

3.2

April 15, 2019

10.3

Amended and Restated Executive Severance and Change in Control Policy

10-Q

001-38856

10.3

December 1, 2023

31.1

Certification of the Chief Executive Officer pursuant to Exchange Act Rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith

31.2

Certification of the Chief Financial Officer pursuant to Exchange Act Rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith

32.1*

Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Furnished herewith

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Filed herewith

101.SCH

XBRL Taxonomy Extension Schema Document.

Filed herewith

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

Filed herewith

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

Filed herewith

101.LAB

XBRL Taxonomy Extension Label Linkbase Document.

Filed herewith

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.

Filed herewith

104

Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, and 101.PRE).

* The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.

† Indicates a management contract or compensatory plan.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		PAGERDUTY, INC.

Date: May 31, 2024	By:	/s/ Jennifer G. Tejada
		Jennifer G. Tejada
		Chief Executive Officer
		(Principal Executive Officer)

Date: May 31, 2024	By:	/s/ Owen Howard Wilson
		Owen Howard Wilson
		Chief Financial Officer
		(Principal Financial Officer)

Date: May 31, 2024	By:	/s/ Mitra Rezvan
		Mitra Rezvan
		Senior Vice President, Finance and Chief Accounting Officer
		(Principal Accounting Officer)

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF

THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jennifer G. Tejada, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of PagerDuty, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 31, 2024

/s/ Jennifer G. Tejada

Jennifer G. Tejada

Chief Executive Officer

(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF

THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Owen Howard Wilson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of PagerDuty, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 31, 2024

/s/ Owen Howard Wilson

Owen Howard Wilson

Chief Financial Officer

(Principal Financial Officer)

Exhibit 32.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Jennifer G. Tejada, the Chief Executive Officer of PagerDuty, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of PagerDuty, Inc. for the fiscal quarter ended April 30, 2024 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of PagerDuty, Inc.

Date: May 31, 2024

/s/ Jennifer G. Tejada

Jennifer G. Tejada

Chief Executive Officer

(Principal Executive Officer)

I, Owen Howard Wilson, the Chief Financial Officer of PagerDuty, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of PagerDuty, Inc. for the fiscal quarter ended April 30, 2024 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of PagerDuty, Inc.

Date: May 31, 2024

/s/ Owen Howard Wilson

Owen Howard Wilson

Chief Financial Officer

(Principal Financial Officer)

Cover Page - shares	3 Months Ended
Cover Page - shares	Apr. 30, 2024	May 29, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Apr. 30, 2024
Document Transition Report	false
Entity File Number	001-38856
Entity Registrant Name	PAGERDUTY, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-2793871
Entity Address, Address Line One	600 Townsend St.
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94103
City Area Code	844
Local Phone Number	800-3889
Title of 12(b) Security	Common Stock, $0.000005 par value
Trading Symbol	PD
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		95,600,016
Entity Central Index Key	0001568100
Current Fiscal Year End Date	--01-31
Document Fiscal Year Focus	2025
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Apr. 30, 2024	Jan. 31, 2024
Current assets:
Cash and cash equivalents	$ 382,541	$ 363,011
Investments	210,242	208,178
Accounts receivable, net of allowance for credit losses of $1,142 and $1,382 as of April 30, 2024 and January 31, 2024, respectively	77,536	100,413
Deferred contract costs, current	19,612	19,502
Prepaid expenses and other current assets	17,045	12,094
Total current assets	706,976	703,198
Property and equipment, net	17,400	17,632
Deferred contract costs, non-current	24,532	25,118
Lease right-of-use assets	2,943	3,789
Goodwill	137,401	137,401
Intangible assets, net	29,467	32,616
Other assets	5,324	5,552
Total assets	924,043	925,306
Current liabilities:
Accounts payable	6,558	6,242
Accrued expenses and other current liabilities	12,893	15,472
Accrued compensation	28,609	30,239
Deferred revenue, current	219,571	223,522
Lease liabilities, current	5,498	6,180
Total current liabilities	273,129	281,655
Convertible senior notes, net	448,667	448,030
Deferred revenue, non-current	4,022	4,639
Lease liabilities, non-current	5,979	6,809
Other liabilities	4,209	5,280
Total liabilities	736,006	746,413
Commitments and contingencies (Note 10)
Redeemable non-controlling interest (Note 3)	14,004	7,293
Stockholders’ equity:
Common stock	0	0
Additional paid-in capital	794,842	774,768
Accumulated other comprehensive loss	(1,235)	(733)
Accumulated deficit	(569,574)	(552,435)
Treasury stock	(50,000)	(50,000)
Total stockholders’ equity	174,033	171,600
Total liabilities, redeemable non-controlling interest, and stockholders’ equity	$ 924,043	$ 925,306

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Apr. 30, 2024	Jan. 31, 2024
Current assets:
Allowance for doubtful accounts	$ 1,142	$ 1,382

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Income Statement [Abstract]
Revenue	$ 111,172	$ 103,246
Cost of revenue	19,343	17,936
Gross profit	91,829	85,310
Operating expenses:
Research and development	37,523	33,508
Sales and marketing	48,499	43,801
General and administrative	27,540	23,801
Total operating expenses	113,562	101,110
Loss from operations	(21,733)	(15,800)
Interest income	6,980	4,203
Interest expense	(2,148)	(1,334)
Other expense, net	(251)	(13)
Loss before (provision for) benefit from income taxes	(17,152)	(12,944)
(Provision for) benefit from income taxes	(193)	106
Net loss	(17,345)	(12,838)
Net loss attributable to redeemable non-controlling interest	(206)	(620)
Net loss attributable to PagerDuty, Inc.	(17,139)	(12,218)
Adjustment attributable to redeemable non-controlling interest	6,917	0
Net loss attributable to PagerDuty, Inc. common stockholders	$ (24,056)	$ (12,218)
Net loss per share, basic, attributable to PagerDuty, Inc. (in dollars per share)	$ (0.26)	$ (0.13)
Net loss per share, diluted, attributable to PagerDuty, Inc. (in dollars per share)	$ (0.26)	$ (0.13)
Weighted average shares used in calculating net loss per share, basic (in shares)	92,876	91,522
Weighted average shares used in calculating net loss per share, diluted (in shares)	92,876	91,522

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Statement of Comprehensive Income [Abstract]
Net loss	$ (17,345)	$ (12,838)
Unrealized (loss) gain on investments	(564)	380
Foreign currency translation adjustments	62	(66)
Total comprehensive loss	(17,847)	(12,524)
Net loss attributable to redeemable non-controlling interest	(206)	(620)
Foreign currency translation adjustments attributable to redeemable non-controlling interest	0	4
Comprehensive loss attributable to redeemable non-controlling interest	(206)	(616)
Comprehensive loss attributable to PagerDuty, Inc.	$ (17,641)	$ (11,908)

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Treasury Stock
Beginning balance (in shares) at Jan. 31, 2023		91,178,671
Beginning balance at Jan. 31, 2023	$ 240,978	$ 0	$ 719,816	$ (1,592)	$ (477,246)
Treasury stock, beginning balance (in shares) at Jan. 31, 2023	0
Treasury stock, beginning balance at Jan. 31, 2023						$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options and restricted stock agreements (in shares)		519,852
Issuance of common stock upon exercise of stock options	$ 4,332		4,332
Vesting of restricted stock units, net of employee payroll taxes (in shares)		396,019
Vesting of restricted stock units, net of employee payroll taxes	(8,820)		(8,820)
Other comprehensive income	314			314
Stock-based compensation	27,890		27,890
Adjustments to redeemable non-controlling interest	0
Net loss attributable to PagerDuty, Inc.	(12,218)				(12,218)
Ending balance (in shares) at Apr. 30, 2023		92,094,542
Ending balance at Apr. 30, 2023	$ 252,476	$ 0	743,218	(1,278)	(489,464)
Treasury stock, ending balance (in shares) at Apr. 30, 2023	0
Treasury stock, ending balance at Apr. 30, 2023						$ 0
Beginning balance (in shares) at Jan. 31, 2024		95,068,187
Beginning balance at Jan. 31, 2024	$ 171,600	$ 0	774,768	(733)	(552,435)
Treasury stock, beginning balance (in shares) at Jan. 31, 2024						2,331,002
Treasury stock, beginning balance at Jan. 31, 2024	(50,000)					$ (50,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options and restricted stock agreements (in shares)		41,875
Issuance of common stock upon exercise of stock options	291		291
Vesting of restricted stock units, net of employee payroll taxes (in shares)		489,663
Vesting of restricted stock units, net of employee payroll taxes	(6,552)		(6,552)
Other comprehensive income	(502)			(502)
Stock-based compensation	33,252		33,252
Adjustments to redeemable non-controlling interest	(6,917)		(6,917)
Net loss attributable to PagerDuty, Inc.	(17,139)				(17,139)
Ending balance (in shares) at Apr. 30, 2024		95,599,725
Ending balance at Apr. 30, 2024	174,033	$ 0	$ 794,842	$ (1,235)	$ (569,574)
Treasury stock, ending balance (in shares) at Apr. 30, 2024						2,331,002
Treasury stock, ending balance at Apr. 30, 2024	$ (50,000)					$ (50,000)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Statement of Cash Flows [Abstract]
Net loss attributable to PagerDuty, Inc. common stockholders	$ (24,056)	$ (12,218)
Net loss and adjustment attributable to redeemable non-controlling interest (Note 3)	6,711	(620)
Net loss	(17,345)	(12,838)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	5,292	4,725
Amortization of deferred contract costs	5,279	4,990
Amortization of debt issuance costs	608	455
Stock-based compensation	32,940	27,545
Non-cash lease expense	846	1,176
Other	(1,302)	(852)
Changes in operating assets and liabilities:
Accounts receivable	22,716	30,003
Deferred contract costs	(4,805)	(3,372)
Prepaid expenses and other assets	(4,813)	(2,207)
Accounts payable	268	(1,206)
Accrued expenses and other liabilities	(3,435)	(244)
Accrued compensation	(1,667)	(17,286)
Deferred revenue	(4,423)	(7,246)
Lease liabilities	(1,512)	(1,491)
Net cash provided by operating activities	28,647	22,152
Cash flows from investing activities
Purchases of property and equipment	(457)	(235)
Capitalized internal-use software costs	(1,092)	(1,072)
Purchases of available-for-sale investments	(50,065)	(39,085)
Proceeds from maturities of available-for-sale investments	46,556	48,955
Proceeds from sales of available-for-sale investments	2,237	0
Net cash (used in) provided by investing activities	(2,821)	8,563
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of stock options	291	4,751
Employee payroll taxes paid related to net share settlement of restricted stock units	(6,552)	(8,820)
Net cash used in financing activities	(6,261)	(4,069)
Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash	(115)	(60)
Net increase in cash, cash equivalents, and restricted cash	19,450	26,586
Cash, cash equivalents, and restricted cash at beginning of period	366,667	274,019
Cash, cash equivalents, and restricted cash at end of period	386,117	300,605
Cash and cash equivalents	382,541	300,605
Restricted Cash and Investments	3,576	0
Supplemental cash flow data:
Cash paid for income taxes	31	78
Cash paid for interest	3,069	0
Non-cash investing and financing activities:
Purchase of property and equipment, accrued but not yet paid	320	199
Stock-based compensation capitalized in internal use software	312	345
Unpaid bonus capitalized in internal use software	$ 56	$ 69

Description of Business and Basis of Presentation	3 Months Ended
Description of Business and Basis of Presentation	Apr. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business and Basis of Presentation	Description of Business and Basis of Presentation Description of Business PagerDuty, Inc. was incorporated under the laws of the state of Delaware in May 2010. PagerDuty is a digital operations management platform that manages urgent and mission-critical work for a modern, digital business. PagerDuty collects data and digital signals from virtually any software-enabled system or device and leverages powerful machine learning to correlate, process, and predict opportunities and issues. Using incident response, event management, and automation, the Company brings together the right people with the right information so they can resolve issues and act on opportunities in minutes or seconds from wherever they are. As used herein, “PagerDuty”, “we”, “our”, “the Company” and similar terms include PagerDuty, Inc., unless the context indicates otherwise. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated balance sheet as of January 31, 2024 was derived from the audited consolidated financial statements as of that date but does not include all of the information and notes required by GAAP for complete financial statements. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended January 31, 2024, included in the Annual Report. The condensed consolidated financial statements include the results of the Company, its wholly-owned subsidiaries, and subsidiaries in which the Company holds a controlling interest. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the information contained herein reflects all adjustments necessary for a fair statement of the Company’s financial position, results of operations and comprehensive loss, stockholders’ equity, and cash flows. The results of operations for the three months ended April 30, 2024 are not necessarily indicative of the results to be expected for the full year ending January 31, 2025 or for any other interim period, or for any future year. The Company’s fiscal year ends on January 31. References to fiscal 2025, for example, refer to the fiscal year ending January 31, 2025. Reclassification Certain reclassifications of prior period amounts have been made in the Company’s condensed consolidated statements of operations to conform to the current period presentation. The Company has reclassified a portion of other income to the interest income line item on the accompanying condensed consolidated statements of operations. These reclassifications had no effect on the reported results of operations. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make, on an ongoing basis, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. The Company’s most significant estimates and judgments involve the period of benefit for amortizing deferred contract costs, the determination of the fair value of acquired assets and assumed liabilities, stock-based compensation, redemption value of redeemable non-controlling interests, and estimates related to the Company’s revenue recognition, such as the assessment of performance obligations in the Company’s revenue arrangements and the fair value assigned to each performance obligation, among others. Management bases its estimates on historical experience and on various other assumptions which management believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Summary of Significant Accounting Policies	3 Months Ended
Summary of Significant Accounting Policies	Apr. 30, 2024
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Concentrations of Risk and Significant Customers The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, available-for-sale investments, and accounts receivable. All of the Company’s cash equivalents and investments are invested in money market funds, United States (“U.S.”) Treasury securities, commercial paper, corporate debt securities, or U.S. Government agency securities that management believes to be of high credit quality. The Company’s cash, cash equivalents, and available-for-sale investments are spread across several different financial institutions. No single customer accounted for more than 10% of the total accounts receivable balance as of April 30, 2024 or January 31, 2024. No single customer represented 10% or more of revenue for the three months ended April 30, 2024 or 2023. Segment Information The Company manages its operations and allocates resources as one operating segment. The Company’s chief operating decision maker (“CODM”) is its chief executive officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. Refer to Note 15, “Geographic Information” for information regarding the Company's long-lived assets and revenue by geography. Related Party Transactions Certain members of the Company’s Board of Directors serve as directors of, or are executive officers of, and in some cases are investors in, companies that are customers or vendors of the Company. The Company billed $4.0 million and $3.8 million to entities associated with related parties in the three months ended April 30, 2024 and 2023, respectively. The Company recognized $4.0 million and $3.2 million in accounts receivable associated with related parties as of April 30, 2024 and 2023, respectively. Other related party transactions were not material for the three months ended April 30, 2024 and 2023. Significant Accounting Policies There have been no significant changes to the Company’s significant accounting policies as compared to those described in the Annual Report. Restricted Cash The Company has classified cash that is not available for use in its operations as restricted cash. Restricted cash consists primarily of collateral for letters of credit related to security deposits for the Company’s office facility lease arrangements. As of April 30, 2024 and January 31, 2024, the Company had restricted cash of $3.6 million and $3.7 million, respectively, all of which was classified as non-current. Recent Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and requires retrospective application to all prior periods. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. In December 2023, the FASB issued Accounting Standard Update (“ASU”) No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

Redeemable Non-Controlling Interest

3 Months Ended

Apr. 30, 2024

Noncontrolling Interest [Abstract]

Redeemable Non-Controlling Interest

In May 2022, the Company established a joint venture, PagerDuty K.K. The Company obtained a 51% controlling interest and has consolidated the financial results of the joint venture.

The following table summarizes the activity in the redeemable non-controlling interest for the periods indicated below:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Balance at beginning of period	$	7,293	$	1,108
Net loss attributable to redeemable non-controlling interest	(206)		(620)
Adjustments to redeemable non-controlling interest	6,917		—
Foreign currency translation adjustments	—		4
Balance at end of period	$	14,004	$	492

Cash, Cash Equivalents, and Investments

3 Months Ended

Apr. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Cash, Cash Equivalents, and Investments

Cash, cash equivalents, and investments consisted of the following:


	As of April 30, 2024		As of January 31, 2024
	(in thousands)
Cash and cash equivalents
Cash	$	50,282	$	55,736
Money market funds	325,781		305,283
Commercial paper	5,480		994
U.S. Treasury securities	998		998
Total cash and cash equivalents	$	382,541	$	363,011
Available-for-sale investments:
U.S. Treasury securities	$	56,683	$	50,036
Commercial paper	17,102		2,886
Corporate debt securities	108,484		131,259
U.S. Government agency securities	27,973		23,997
Total available-for-sale investments	$	210,242	$	208,178


	As of April 30, 2024
	Cost Basis		Unrealized Loss, Net		Estimated Fair Value
	(in thousands)
Available-for-sale investments:
U.S. Treasury securities	$	56,750	$	(67)	$	56,683
Commercial paper	17,128		(26)		17,102
Corporate debt securities	108,958		(474)		108,484
U.S. Government agency securities	28,069		(96)		27,973
Total available-for-sale investments	$	210,905	$	(663)	$	210,242


	As of January 31, 2024
	Cost Basis		Unrealized Gain (Loss), Net		Estimated Fair Value
	(in thousands)
Available-for-sale investments:
U.S. Treasury securities	$	50,012	$	24	$	50,036
Commercial paper	2,887		(1)		2,886
Corporate debt securities	131,395		(136)		131,259
U.S. Government agency securities	23,983		14		23,997
Total available-for-sale investments	$	208,277	$	(99)	$	208,178

The following tables present the Company’s available-for-sale securities by contractual maturity date as of April 30, 2024 and January 31, 2024:


	As of April 30, 2024
	Cost Basis		Fair Value
	(in thousands)
Due within one year	$	168,837	$	168,389
Due between one to five years	42,068		41,853
Total	$	210,905	$	210,242


	As of January 31, 2024
	Cost Basis		Fair Value
	(in thousands)
Due within one year	$	155,423	$	155,158
Due between one to five years	52,854		53,020
Total	$	208,277	$	208,178

Fair Value Measurements

3 Months Ended

Apr. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value, as follows:

Level 1—Valuations based on observable inputs that reflect quoted prices for identical assets or liabilities in active markets.

Level 2—Valuations based on inputs that are directly or indirectly observable in the marketplace.

Level 3—Valuations based on unobservable inputs that are supported by little or no market activity.

The following tables present information about the Company’s financial assets that are required to be measured or disclosed at fair value using the above input categories:


	As of April 30, 2024
	Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	325,781	$	—	$	—	$	325,781
U.S. Treasury securities	—		57,681		—		57,681
Commercial paper	—		22,582		—		22,582
Corporate debt securities	—		108,484		—		108,484
U.S. Government agency securities	—		27,973		—		27,973
Total	$	325,781	$	216,720	$	—	$	542,501
Included in cash equivalents							$	332,259
Included in investments							$	210,242


	As of January 31, 2024
	Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	305,283	$	—	$	—	$	305,283
U.S. Treasury securities	—		51,034		—		51,034
Commercial paper	—		3,880		—		3,880
Corporate debt securities	—		131,259		—		131,259
U.S. Government agency securities	—		23,997		—		23,997
Total	$	305,283	$	210,170	$	—	$	515,453
Included in cash equivalents							$	307,275
Included in investments							$	208,178

The Company’s assets that are measured by management at fair value on a recurring basis are generally classified within Level 1 or Level 2 of the fair value hierarchy.

Convertible Senior Notes

Property and Equipment, Net

3 Months Ended

Apr. 30, 2024

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and equipment, net, consisted of the following:


	As of April 30, 2024		As of January 31, 2024
	(in thousands)
Leasehold improvements	$	6,810	$	11,334
Computers and equipment	9,420		9,135
Furniture and fixtures	3,911		3,989
Capitalized internal-use software	19,718		18,257
Gross property and equipment (1)	39,859		42,715
Accumulated depreciation and amortization	(22,459)		(25,083)
Property and equipment, net	$	17,400	$	17,632

Depreciation and amortization expense was $2.0 million and $1.8 million for the three months ended April 30, 2024 and 2023, respectively.

Deferred Contract Costs

3 Months Ended

Apr. 30, 2024

Revenue from Contract with Customer [Abstract]

Deferred Contract Costs

Deferred Revenue and Performance Obligations

The following table presents the changes to the Company’s deferred revenue:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Deferred revenue, beginning of period	$	228,161	$	209,051
Billings	106,604		96,000
Revenue recognized	(111,172)		(103,246)
Deferred revenue, end of period	$	223,593	$	201,805

For the three months ended April 30, 2024 and 2023, the majority of revenue recognized was from the deferred revenue balances at the beginning of each quarter.

Leases

3 Months Ended

Apr. 30, 2024

Leases [Abstract]

Leases

Operating Leases

value of lease payments. The lease right-of-use assets also include any lease payments made and exclude lease incentives such as tenant improvement allowances.

The following table presents information about leases on the condensed consolidated balance sheet.


	As of April 30, 2024		As of January 31, 2024
	(in thousands)
Assets
Lease right-of-use assets	$	2,943	$	3,789
Liabilities
Lease liabilities	5,498		6,180
Lease liabilities, non-current	5,979		6,809

As of April 30, 2024, the weighted average remaining lease term was 3.1 years and the weighted average discount rate used to determine the net present value of the lease liabilities was 3.8%.

The following table presents information about leases on the condensed consolidated statement of operations.


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Operating lease expense	$	829	$	1,358
Short-term lease expense	394		571
Variable lease expense	210		355

The following table presents supplemental cash flow information about the Company’s leases.


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	1,628	$	1,657

There were no impairment charges recorded in the three months ended April 30, 2024 or 2023.

Debt and Financing Arrangements

3 Months Ended

Apr. 30, 2024

Debt Disclosure [Abstract]

Debt and Financing Arrangements

2025 Convertible Senior Notes

In June 2020, the Company issued an aggregate principal amount of $287.5 million of 2025 Notes in a private offering pursuant to an Indenture dated June 25, 2020 (the “2025 Indenture”).

2028 Convertible Senior Notes

Additional Terms of the Notes

•If the Company calls such Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or

•Upon the occurrence of specified corporate events, as noted in the Indenture.

Accounting for the Notes

The net carrying amount of the Notes as of April 30, 2024 and as of January 31, 2024 was as follows:


	As of April 30, 2024
	(in thousands)
	2025 Notes		2028 Notes		Total
Principal	$	57,500	$	402,500	$	460,000
Less: unamortized issuance costs	(464)		(10,869)		(11,333)
Net carrying amount	$	57,036	$	391,631	$	448,667


	As of January 31, 2024
	(in thousands)
	2025 Notes		2028 Notes		Total
Principal	$	57,500	$	402,500	$	460,000
Less: unamortized issuance costs	(597)		(11,373)		(11,970)
Net carrying amount	$	56,903	$	391,127	$	448,030

Interest expense recognized related to the Notes during the three months ended April 30, 2024 and 2023 is as follows:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Contractual interest expense	$	1,540	$	879
Amortization of debt issuance costs	608		455
Total interest expense related to the Notes	$	2,148	$	1,334

Capped Call Transactions

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Apr. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Legal Matters From time to time in the normal course of business, the Company may be subject to various claims and other legal matters arising in the ordinary course of business. The Company investigates these claims as they arise and accrues estimates for resolution of legal and other contingencies when losses are probable and estimable. The Company is not currently a party to any material legal proceedings nor is it aware of any pending or threatened litigation that could reasonably be expected to have a material adverse effect on its business, financial condition, results of operations, or cash flows. Warranties and Indemnification The Company has entered into service-level agreements with a portion of its customers defining levels of uptime reliability and performance and permitting those customers to receive credits if the Company fails to meet the defined levels of uptime. To date, the Company has not experienced any significant failures to meet defined levels of uptime reliability and performance as a result of those agreements and, as a result, the Company has not incurred or accrued any material liabilities related to these agreements in the financial statements. In the ordinary course of business, the Company may agree to indemnify customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. As permitted under Delaware law, the Company has entered into indemnification agreements with its directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No demands have been made upon the Company to provide indemnification under such agreements, and there are no claims that the Company is aware of that could have a material effect on its consolidated balance sheets, consolidated statements of operations and comprehensive loss, or consolidated statements of cash flows.

Deferred Revenue and Performance Obligations

3 Months Ended

Apr. 30, 2024

Revenue from Contract with Customer [Abstract]

Deferred Revenue and Performance Obligations

Deferred Contract Costs

Deferred Revenue and Performance Obligations

The following table presents the changes to the Company’s deferred revenue:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Deferred revenue, beginning of period	$	228,161	$	209,051
Billings	106,604		96,000
Revenue recognized	(111,172)		(103,246)
Deferred revenue, end of period	$	223,593	$	201,805

For the three months ended April 30, 2024 and 2023, the majority of revenue recognized was from the deferred revenue balances at the beginning of each quarter.

Common Stock and Stockholders' Equity

3 Months Ended

Apr. 30, 2024

Equity [Abstract]

Common Stock and Stockholders' Equity

Common Stock and Stockholders’ Equity

Common Stock Repurchase

Equity Incentive Plan

Shares of common stock reserved for future issuance are as follows:


			April 30, 2024
Outstanding stock options and unvested RSUs and PSUs			15,595,062
Available for future stock option, RSU, and PSU grants			19,846,670
Available for Employee Stock Purchase Plan (“ESPP”)			4,297,539
Total common stock reserved at April 30, 2024			39,739,271

Stock Option Activity

Stock option activity is as follows:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
					(in thousands)
Outstanding at January 31, 2024	4,875,025	$	10.29	4.4 years	$	68,151
Granted	—	$	—
Exercised	(41,875)	$	6.94
Canceled	(12,289)	$	13.30
Outstanding at April 30, 2024	4,820,861	$	10.31	4.1 years	$	50,306
Vested as of April 30, 2024	4,718,085	$	9.88	4.0 years	$	50,064

The intrinsic value for options exercised is the difference between the market value of the stock and the exercise price of the stock option at the date of exercise.

Restricted Stock Units

A summary of the Company’s RSU activity and related information is as follows:


	Number of RSUs	Weighted Average Grant Date Fair Value Per Share
Outstanding at January 31, 2024	7,412,056	$	31.08
Granted	2,924,763	$	21.63
Vested	(783,267)	$	30.73
Forfeited or canceled	(342,977)	$	29.79
Outstanding at April 30, 2024	9,210,575	$	28.17

The fair value of RSUs is based on the fair value of the underlying shares on the date of grant. The Company accounts for forfeitures as they occur.

Performance Stock Units

A summary of the Company’s PSU activity and related information is as follows:


	Number of PSUs	Weighted Average Grant Date Fair Value Per Share
Outstanding at January 31, 2024	541,992	$	35.08
Granted(1)	781,813	$	21.62
Vested	(9,050)	$	41.17
Forfeited or canceled	(3,280)	$	41.88
Performance adjustment for 2023 PSU Awards	(529,662)	$	34.98
Outstanding at April 30, 2024	781,813	$	28.14
(1)This amount represents awards granted at 100% attainment.

Employee Stock Purchase Plan

During the three months ended April 30, 2024 and 2023, the Company recognized $1.7 million and $1.8 million, respectively, of stock-based compensation expense related to the ESPP.

During the three months ended April 30, 2024 and 2023, the Company withheld $3.1 million and $3.7 million, respectively, in contributions from employees.

During the three months ended April 30, 2024 and 2023, there were no purchases related to the ESPP.

Stock-Based Compensation

Stock-based compensation expense included in the Company’s condensed consolidated statements of operations is as follows:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Cost of revenue	$	1,756	$	1,876
Research and development	11,222		10,101
Sales and marketing	7,947		5,951
General and administrative	12,015		9,617
Total	$	32,940	$	27,545

Net Loss per Share

3 Months Ended

Apr. 30, 2024

Earnings Per Share [Abstract]

Net Loss per Share

The following table presents the calculation of basic and diluted net loss per share attributable to PagerDuty, Inc. common stockholders:


	Three Months Ended April 30,
	2024		2023
	(in thousands, except per share data)
Numerator:
Net loss attributable to PagerDuty, Inc. common stockholders	$	(17,139)	$	(12,218)
Adjustment attributable to redeemable non-controlling interest	6,917		—
Net loss attributable to PagerDuty, Inc. common stockholders	(24,056)		(12,218)
Denominator:
Weighted average shares used in calculating net income (loss) per share, basic and diluted	92,876		91,522
Net loss per share, basic and diluted, attributable to PagerDuty, Inc. common stockholders	$	(0.26)	$	(0.13)

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:


	As of April 30,
	2024	2023
	(in thousands)
Shares subject to outstanding common stock awards	14,813	15,674
Restricted stock issued to acquire key personnel	25	63
Shares issuable pursuant to the ESPP	267	295

Income Taxes	3 Months Ended
Income Taxes	Apr. 30, 2024
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company's provision for income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Company's quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income (or loss) relates, changes in how the Company does business, and tax law developments. The Company's estimated effective tax rate for the year differs from the U.S. statutory rate of 21% as a result of our U.S. losses for which no benefit will be realized, our foreign operations which are subject to tax rates that differ from those in the U.S., as well as the benefit for non-U.S. income tax credits. The Company recorded an income tax provision of $0.2 million and an income tax benefit of $0.1 million for the three months ended April 30, 2024 and 2023, respectively.

Geographic Information

3 Months Ended

Apr. 30, 2024

Segment Reporting [Abstract]

Geographic Information

Revenue by location is generally determined by the billing address of the customer. The following table sets forth revenue by geographic area:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
United States	$	80,792	$	74,834
International	30,380		28,412
Total	$	111,172	$	103,246

Other than the United States, no other individual country accounted for 10% or more of revenue for the three months ended April 30, 2024 or 2023.

Subsequent Events	3 Months Ended
Subsequent Events	Apr. 30, 2024
Subsequent Events [Abstract]
Subsequent Events	Subsequent Event On May 30, 2024, the Company’s Board of Directors authorized a share repurchase program for the repurchase of shares of the Company’s common stock, in an aggregate amount of up to $100.0 million (the “Share Repurchase Program”). Share repurchases under the Share Repurchase Program may be made from time to time on the open market, pursuant to Rule 10b5-1 trading plans, or other legally permissible means. The Share Repurchase Program has a term of 24 months and does not obligate the Company to acquire a specified number of shares, and may be suspended, modified, or terminated at any time, without prior notice. The number of shares to be repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities.

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Apr. 30, 2024	Apr. 30, 2023
Pay vs Performance Disclosure
Net loss attributable to PagerDuty, Inc.	$ (17,139)	$ (12,218)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Apr. 30, 2024
Elena Gomez [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	On April 1, 2024, Elena Gomez, a member of our Board, adopted a trading plan for the sale of the Company’s common stock that is intended to satisfy the affirmative defense of Rule 10b5-1(c). The trading plan is set to expire on June 13, 2025 and provides for the sale of up to 15,244 shares of common stock, all of which are subject to the Company’s stock price reaching certain price thresholds.
Name	Elena Gomez
Title	member of our Board
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	April 1, 2024
Arrangement Duration	438 days
Jennifer Tejada [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	On April 9, 2024, Jennifer Tejada, our Chief Executive Officer and a member of our Board, adopted a trading plan for the sale of the Company’s common stock that is intended to satisfy the affirmative defense of Rule 10b5-1(c). The trading plan was set to expire on June 27, 2025 and provided for the following transactions: (i) the exercise of up to 800,000 stock options and the sale of the underlying shares of common stock, subject to the Company’s stock price reaching certain price thresholds; and (ii) the sale of up to 102,509 shares of common stock, all of which are subject to the Company’s stock price reaching certain price thresholds.
Name	Jennifer Tejada
Title	Chief Executive Officer and a member of our Board
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	April 9, 2024
Arrangement Duration	444 days
Owen Howard Wilson [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	On April 10, 2024, Owen Howard Wilson, our Chief Financial Officer, adopted a trading plan for the sale of the Company’s common stock that is intended to satisfy the affirmative defense of Rule 10b5-1(c). The trading plan is set to expire on June 27, 2025 and provides for the following transactions: the sale of up to 241,411 shares of common stock, all of which are subject to the Company’s stock price reaching certain price thresholds.
Name	Owen Howard Wilson
Title	Chief Financial Officer
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	April 10, 2024
Arrangement Duration	443 days

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Apr. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting.
Fiscal Period	Reclassification Certain reclassifications of prior period amounts have been made in the Company’s condensed consolidated statements of operations to conform to the current period presentation.
Consolidation	The condensed consolidated balance sheet as of January 31, 2024 was derived from the audited consolidated financial statements as of that date but does not include all of the information and notes required by GAAP for complete financial statements. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended January 31, 2024, included in the Annual Report. The condensed consolidated financial statements include the results of the Company, its wholly-owned subsidiaries, and subsidiaries in which the Company holds a controlling interest. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make, on an ongoing basis, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. The Company’s most significant estimates and judgments involve the period of benefit for amortizing deferred contract costs, the determination of the fair value of acquired assets and assumed liabilities, stock-based compensation, redemption value of redeemable non-controlling interests, and estimates related to the Company’s revenue recognition, such as the assessment of performance obligations in the Company’s revenue arrangements and the fair value assigned to each performance obligation, among others. Management bases its estimates on historical experience and on various other assumptions which management believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
Concentrations of Risk and Significant Customers	Concentrations of Risk and Significant Customers The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, available-for-sale investments, and accounts receivable. All of the Company’s cash equivalents and investments are invested in money market funds, United States (“U.S.”) Treasury securities, commercial paper, corporate debt securities, or U.S. Government agency securities that management believes to be of high credit quality. The Company’s cash, cash equivalents, and available-for-sale investments are spread across several different financial institutions.
Segment Information	Segment Information The Company manages its operations and allocates resources as one operating segment. The Company’s chief operating decision maker (“CODM”) is its chief executive officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources.
Restricted Cash	Restricted Cash The Company has classified cash that is not available for use in its operations as restricted cash. Restricted cash consists primarily of collateral for letters of credit related to security deposits for the Company’s office facility lease arrangements.
Redeemable Non-Controlling Interest	Recent Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and requires retrospective application to all prior periods. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.
Operating Leases	Operating Leases The Company has entered into various non-cancellable operating leases for its office spaces with lease periods expiring between fiscal 2026 and fiscal 2029. The operating lease agreements generally provide for rental payments on a graduated basis and for options to renew, which could increase future minimum lease payments if exercised. Lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The lease right-of-use assets also include any lease payments made and exclude lease incentives such as tenant improvement allowances. The operating leases typically include non-lease components such as common-area maintenance costs. The Company has elected to include non-lease components with lease payments for the purpose of calculating lease right-of-use assets and liabilities, to the extent that they are fixed. Non-lease components that are not fixed are expensed as incurred as variable lease payments. Leases with a term of one year or less are not recognized on our condensed consolidated balance sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. In June 2023, the Company entered into a sublease for a portion of the San Francisco office location. The sublease has a remaining lease term of less than one year from the sublease inception date. Sublease income, which is recorded as a reduction of rent expense, was not material for the three months ended April 30, 2024.

Redeemable Non-Controlling Interest (Tables)

3 Months Ended

Apr. 30, 2024

Noncontrolling Interest [Abstract]

Summary of Redeemable Noncontrolling Interest

The following table summarizes the activity in the redeemable non-controlling interest for the periods indicated below:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Balance at beginning of period	$	7,293	$	1,108
Net loss attributable to redeemable non-controlling interest	(206)		(620)
Adjustments to redeemable non-controlling interest	6,917		—
Foreign currency translation adjustments	—		4
Balance at end of period	$	14,004	$	492

Cash, Cash Equivalents, and Investments (Tables)

3 Months Ended

Apr. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Components of Cash and Cash Equivalents

Cash, cash equivalents, and investments consisted of the following:


	As of April 30, 2024		As of January 31, 2024
	(in thousands)
Cash and cash equivalents
Cash	$	50,282	$	55,736
Money market funds	325,781		305,283
Commercial paper	5,480		994
U.S. Treasury securities	998		998
Total cash and cash equivalents	$	382,541	$	363,011
Available-for-sale investments:
U.S. Treasury securities	$	56,683	$	50,036
Commercial paper	17,102		2,886
Corporate debt securities	108,484		131,259
U.S. Government agency securities	27,973		23,997
Total available-for-sale investments	$	210,242	$	208,178

Summary of Components of Available-for-sale Investments

Cash, cash equivalents, and investments consisted of the following:


	As of April 30, 2024		As of January 31, 2024
	(in thousands)
Cash and cash equivalents
Cash	$	50,282	$	55,736
Money market funds	325,781		305,283
Commercial paper	5,480		994
U.S. Treasury securities	998		998
Total cash and cash equivalents	$	382,541	$	363,011
Available-for-sale investments:
U.S. Treasury securities	$	56,683	$	50,036
Commercial paper	17,102		2,886
Corporate debt securities	108,484		131,259
U.S. Government agency securities	27,973		23,997
Total available-for-sale investments	$	210,242	$	208,178

Summary of Carrying Value of Available-for-sale Investments


	As of April 30, 2024
	Cost Basis		Unrealized Loss, Net		Estimated Fair Value
	(in thousands)
Available-for-sale investments:
U.S. Treasury securities	$	56,750	$	(67)	$	56,683
Commercial paper	17,128		(26)		17,102
Corporate debt securities	108,958		(474)		108,484
U.S. Government agency securities	28,069		(96)		27,973
Total available-for-sale investments	$	210,905	$	(663)	$	210,242


	As of January 31, 2024
	Cost Basis		Unrealized Gain (Loss), Net		Estimated Fair Value
	(in thousands)
Available-for-sale investments:
U.S. Treasury securities	$	50,012	$	24	$	50,036
Commercial paper	2,887		(1)		2,886
Corporate debt securities	131,395		(136)		131,259
U.S. Government agency securities	23,983		14		23,997
Total available-for-sale investments	$	208,277	$	(99)	$	208,178

Summary of Contractual Maturities of Available-for-sale Securities

The following tables present the Company’s available-for-sale securities by contractual maturity date as of April 30, 2024 and January 31, 2024:


	As of April 30, 2024
	Cost Basis		Fair Value
	(in thousands)
Due within one year	$	168,837	$	168,389
Due between one to five years	42,068		41,853
Total	$	210,905	$	210,242


	As of January 31, 2024
	Cost Basis		Fair Value
	(in thousands)
Due within one year	$	155,423	$	155,158
Due between one to five years	52,854		53,020
Total	$	208,277	$	208,178

Fair Value Measurements (Tables)

3 Months Ended

Apr. 30, 2024

Fair Value Disclosures [Abstract]

Summary of Information about Company's Financial Assets

The following tables present information about the Company’s financial assets that are required to be measured or disclosed at fair value using the above input categories:


	As of April 30, 2024
	Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	325,781	$	—	$	—	$	325,781
U.S. Treasury securities	—		57,681		—		57,681
Commercial paper	—		22,582		—		22,582
Corporate debt securities	—		108,484		—		108,484
U.S. Government agency securities	—		27,973		—		27,973
Total	$	325,781	$	216,720	$	—	$	542,501
Included in cash equivalents							$	332,259
Included in investments							$	210,242


	As of January 31, 2024
	Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	305,283	$	—	$	—	$	305,283
U.S. Treasury securities	—		51,034		—		51,034
Commercial paper	—		3,880		—		3,880
Corporate debt securities	—		131,259		—		131,259
U.S. Government agency securities	—		23,997		—		23,997
Total	$	305,283	$	210,170	$	—	$	515,453
Included in cash equivalents							$	307,275
Included in investments							$	208,178

Property and Equipment, Net (Tables)

3 Months Ended

Apr. 30, 2024

Property, Plant and Equipment [Abstract]

Summary of Property and Equipment, Net

Property and equipment, net, consisted of the following:


	As of April 30, 2024		As of January 31, 2024
	(in thousands)
Leasehold improvements	$	6,810	$	11,334
Computers and equipment	9,420		9,135
Furniture and fixtures	3,911		3,989
Capitalized internal-use software	19,718		18,257
Gross property and equipment (1)	39,859		42,715
Accumulated depreciation and amortization	(22,459)		(25,083)
Property and equipment, net	$	17,400	$	17,632

Leases (Tables)

3 Months Ended

Apr. 30, 2024

Leases [Abstract]

Summary of Information About Lease on Condensed Consolidated Balance Sheet

The following table presents information about leases on the condensed consolidated balance sheet.


	As of April 30, 2024		As of January 31, 2024
	(in thousands)
Assets
Lease right-of-use assets	$	2,943	$	3,789
Liabilities
Lease liabilities	5,498		6,180
Lease liabilities, non-current	5,979		6,809

Summary of Information About Leases on Condensed Consolidated Statement of Operations and Supplemental Cash Flow Information

The following table presents information about leases on the condensed consolidated statement of operations.


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Operating lease expense	$	829	$	1,358
Short-term lease expense	394		571
Variable lease expense	210		355

The following table presents supplemental cash flow information about the Company’s leases.


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	1,628	$	1,657

Debt and Financing Arrangements (Tables)

3 Months Ended

Apr. 30, 2024

Debt Disclosure [Abstract]

Summary of Net Carrying Amount of Liability and Equity Components of Convertible Notes

The net carrying amount of the Notes as of April 30, 2024 and as of January 31, 2024 was as follows:


	As of April 30, 2024
	(in thousands)
	2025 Notes		2028 Notes		Total
Principal	$	57,500	$	402,500	$	460,000
Less: unamortized issuance costs	(464)		(10,869)		(11,333)
Net carrying amount	$	57,036	$	391,631	$	448,667


	As of January 31, 2024
	(in thousands)
	2025 Notes		2028 Notes		Total
Principal	$	57,500	$	402,500	$	460,000
Less: unamortized issuance costs	(597)		(11,373)		(11,970)
Net carrying amount	$	56,903	$	391,127	$	448,030

Interest expense recognized related to the Notes during the three months ended April 30, 2024 and 2023 is as follows:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Contractual interest expense	$	1,540	$	879
Amortization of debt issuance costs	608		455
Total interest expense related to the Notes	$	2,148	$	1,334

Deferred Revenue and Performance Obligations (Tables)

3 Months Ended

Apr. 30, 2024

Revenue from Contract with Customer [Abstract]

Summary of Deferred Revenue

The following table presents the changes to the Company’s deferred revenue:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Deferred revenue, beginning of period	$	228,161	$	209,051
Billings	106,604		96,000
Revenue recognized	(111,172)		(103,246)
Deferred revenue, end of period	$	223,593	$	201,805

Common Stock and Stockholders' Equity (Tables)

3 Months Ended

Apr. 30, 2024

Equity [Abstract]

Summary of Shares of Common Stock Reserved for Future Issuance

Shares of common stock reserved for future issuance are as follows:


			April 30, 2024
Outstanding stock options and unvested RSUs and PSUs			15,595,062
Available for future stock option, RSU, and PSU grants			19,846,670
Available for Employee Stock Purchase Plan (“ESPP”)			4,297,539
Total common stock reserved at April 30, 2024			39,739,271

Schedule of Stock Option Activity

Stock option activity is as follows:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
					(in thousands)
Outstanding at January 31, 2024	4,875,025	$	10.29	4.4 years	$	68,151
Granted	—	$	—
Exercised	(41,875)	$	6.94
Canceled	(12,289)	$	13.30
Outstanding at April 30, 2024	4,820,861	$	10.31	4.1 years	$	50,306
Vested as of April 30, 2024	4,718,085	$	9.88	4.0 years	$	50,064

Schedule of Restricted Stock Unit Activity

A summary of the Company’s RSU activity and related information is as follows:


	Number of RSUs	Weighted Average Grant Date Fair Value Per Share
Outstanding at January 31, 2024	7,412,056	$	31.08
Granted	2,924,763	$	21.63
Vested	(783,267)	$	30.73
Forfeited or canceled	(342,977)	$	29.79
Outstanding at April 30, 2024	9,210,575	$	28.17

Schedule of Restricted Stock Unit Activity

A summary of the Company’s PSU activity and related information is as follows:


	Number of PSUs	Weighted Average Grant Date Fair Value Per Share
Outstanding at January 31, 2024	541,992	$	35.08
Granted(1)	781,813	$	21.62
Vested	(9,050)	$	41.17
Forfeited or canceled	(3,280)	$	41.88
Performance adjustment for 2023 PSU Awards	(529,662)	$	34.98
Outstanding at April 30, 2024	781,813	$	28.14
(1)This amount represents awards granted at 100% attainment.

Schedule of Stock-based Compensation Expense

Stock-based compensation expense included in the Company’s condensed consolidated statements of operations is as follows:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
Cost of revenue	$	1,756	$	1,876
Research and development	11,222		10,101
Sales and marketing	7,947		5,951
General and administrative	12,015		9,617
Total	$	32,940	$	27,545

Net Loss per Share (Tables)

3 Months Ended

Apr. 30, 2024

Earnings Per Share [Abstract]

Summary of Calculation of Basic and Diluted Net Loss Per Share

The following table presents the calculation of basic and diluted net loss per share attributable to PagerDuty, Inc. common stockholders:


	Three Months Ended April 30,
	2024		2023
	(in thousands, except per share data)
Numerator:
Net loss attributable to PagerDuty, Inc. common stockholders	$	(17,139)	$	(12,218)
Adjustment attributable to redeemable non-controlling interest	6,917		—
Net loss attributable to PagerDuty, Inc. common stockholders	(24,056)		(12,218)
Denominator:
Weighted average shares used in calculating net income (loss) per share, basic and diluted	92,876		91,522
Net loss per share, basic and diluted, attributable to PagerDuty, Inc. common stockholders	$	(0.26)	$	(0.13)

Schedule of Anti-dilutive Securities That Were Not Included in Diluted Per Share Calculations

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:


	As of April 30,
	2024	2023
	(in thousands)
Shares subject to outstanding common stock awards	14,813	15,674
Restricted stock issued to acquire key personnel	25	63
Shares issuable pursuant to the ESPP	267	295

Geographic Information (Tables)

3 Months Ended

Apr. 30, 2024

Segment Reporting [Abstract]

Summary of Disaggregation of Revenue By Geographic Location

Revenue by location is generally determined by the billing address of the customer. The following table sets forth revenue by geographic area:


	Three Months Ended April 30,
	2024		2023
	(in thousands)
United States	$	80,792	$	74,834
International	30,380		28,412
Total	$	111,172	$	103,246

Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands	3 Months Ended
	Apr. 30, 2024 USD ($) segment	Apr. 30, 2023 USD ($)	Jan. 31, 2024 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of operating segments \| segment	1
Accounts receivable	$ 77,536		$ 100,413
Restricted Cash and Investments	3,576	$ 0	3,600
Restricted cash	3,700		3,700
Director
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounts receivable	4,000		$ 3,800
Revenues	4,000	3,200
Cash disbursements	$ 0	$ 0

Redeemable Non-Controlling Interest - Additional Information (Details)	1 Months Ended
	May 31, 2022
Variable Interest Entity, Primary Beneficiary
Noncontrolling Interest [Line Items]
Ownership percentage (as a percent)	51.00%

Redeemable Non-Controlling Interest - Summary of Activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Redeemable Non-Controlling Interest [Roll Forward]
Balance at beginning of period	$ 7,293	$ 1,108
Net loss attributable to redeemable non-controlling interest	(206)	(620)
Adjustments to redeemable non-controlling interest	6,917	0
Foreign currency translation adjustments	0	4
Balance at end of period	$ 14,004	$ 492

Cash, Cash Equivalents, and Investments - Components of Cash and Cash Equivalents and Investments (Details) - USD ($) $ in Thousands	Apr. 30, 2024	Jan. 31, 2024	Apr. 30, 2023
Cash and cash equivalents
Cash	$ 50,282	$ 55,736
Money market funds	325,781	305,283
Commercial paper	5,480	994
U.S. Treasury securities	998	998
Total cash and cash equivalents	382,541	363,011	$ 300,605
Debt Securities, Available-for-sale [Line Items]
Total available-for-sale investments	210,242	208,178
U.S. Treasury securities
Debt Securities, Available-for-sale [Line Items]
Total available-for-sale investments	56,683	50,036
Commercial paper
Debt Securities, Available-for-sale [Line Items]
Total available-for-sale investments	17,102	2,886
Corporate debt securities
Debt Securities, Available-for-sale [Line Items]
Total available-for-sale investments	108,484	131,259
U.S. Government agency securities
Debt Securities, Available-for-sale [Line Items]
Total available-for-sale investments	$ 27,973	$ 23,997

Cash, Cash Equivalents, and Investments - Carrying Value of Investments (Details) - USD ($) $ in Thousands	Apr. 30, 2024	Jan. 31, 2024
Debt Securities, Available-for-sale [Line Items]
Cost Basis	$ 210,905	$ 208,277
Unrealized Gain (Loss), Net	(663)	(99)
Estimated Fair Value	210,242	208,178
U.S. Treasury securities
Debt Securities, Available-for-sale [Line Items]
Cost Basis	56,750	50,012
Unrealized Gain (Loss), Net	(67)	24
Estimated Fair Value	56,683	50,036
Commercial paper
Debt Securities, Available-for-sale [Line Items]
Cost Basis	17,128	2,887
Unrealized Gain (Loss), Net	(26)	(1)
Estimated Fair Value	17,102	2,886
Corporate debt securities
Debt Securities, Available-for-sale [Line Items]
Cost Basis	108,958	131,395
Unrealized Gain (Loss), Net	(474)	(136)
Estimated Fair Value	108,484	131,259
U.S. Government agency securities
Debt Securities, Available-for-sale [Line Items]
Cost Basis	28,069	23,983
Unrealized Gain (Loss), Net	(96)	14
Estimated Fair Value	$ 27,973	$ 23,997

Cash, Cash Equivalents, and Investments - Contractual Maturity (Details) - USD ($) $ in Thousands	Apr. 30, 2024	Jan. 31, 2024
Cost Basis
Due within one year	$ 168,837	$ 155,423
Due between one to five years	42,068	52,854
Cost Basis	210,905	208,277
Fair Value
Due within one year	168,389	155,158
Due between one to five years	41,853	53,020
Fair Value	$ 210,242	$ 208,178

Cash, Cash Equivalents, and Investments - Additional Information (Details) $ in Millions	Apr. 30, 2024 USD ($) security	Jan. 31, 2024 USD ($) security
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Available-for-sale securities in an unrealized loss position \| security	109	70
Securities in unrealized loss position \| $	$ 204.8	$ 108.7
Securities in a continuous net loss position for 12 months or longer \| security	30	33
Securities in continuous unrealized loss position for more than 12 months \| $	$ 0.1	$ 0.2

Fair Value Measurements (Details) - USD ($) $ in Thousands	Apr. 30, 2024	Jan. 31, 2024	Oct. 31, 2023	Jun. 30, 2020
Convertible Senior Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Stated interest rate			1.50%	1.25%
Convertible Senior Notes \| 2025 Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Stated interest rate	1.25%
Convertible Senior Notes \| 2028 Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Stated interest rate	1.50%
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	$ 332,259	$ 307,275
Included in investments	210,242	208,178
Total	542,501	515,453
Recurring \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	325,781	305,283
Recurring \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	216,720	210,170
Recurring \| Level 2 \| 2025 Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of convertible senior notes	54,400
Recurring \| Level 2 \| 2028 Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of convertible senior notes	402,300
Recurring \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
U.S. Treasury securities \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	57,681	51,034
U.S. Treasury securities \| Recurring \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	0	0
U.S. Treasury securities \| Recurring \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	57,681	51,034
U.S. Treasury securities \| Recurring \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	0	0
Commercial paper \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	22,582	3,880
Commercial paper \| Recurring \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	0	0
Commercial paper \| Recurring \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	22,582	3,880
Commercial paper \| Recurring \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	0	0
Corporate debt securities \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	108,484	131,259
Corporate debt securities \| Recurring \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	0	0
Corporate debt securities \| Recurring \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	108,484	131,259
Corporate debt securities \| Recurring \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	0	0
U.S. Government agency securities \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	27,973	23,997
U.S. Government agency securities \| Recurring \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	0	0
U.S. Government agency securities \| Recurring \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	27,973	23,997
U.S. Government agency securities \| Recurring \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Included in investments	0	0
Money market funds \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	325,781	305,283
Money market funds \| Recurring \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	325,781	305,283
Money market funds \| Recurring \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	0	0
Money market funds \| Recurring \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	$ 0	$ 0

Property and Equipment, Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023	Jan. 31, 2024
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 39,859		$ 42,715
Accumulated depreciation and amortization	(22,459)		(25,083)
Property and equipment, net	17,400		17,632
Depreciation and amortization	2,000	$ 1,800
Leasehold improvements
Property, Plant and Equipment [Line Items]
Gross property and equipment	6,810		11,334
Computers and equipment
Property, Plant and Equipment [Line Items]
Gross property and equipment	9,420		9,135
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Gross property and equipment	3,911		3,989
Capitalized internal-use software
Property, Plant and Equipment [Line Items]
Gross property and equipment	19,718		18,257
Construction-in-progress
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 3,800		$ 4,200

Deferred Contract Costs (Details) - USD ($)	3 Months Ended
Deferred Contract Costs (Details) - USD ($)	Apr. 30, 2024	Apr. 30, 2023	Jan. 31, 2024
Revenue from Contract with Customer [Abstract]
Deferred contract costs	$ 44,100,000		$ 44,600,000
Amortization of deferred contract costs	5,279,000	$ 4,990,000
Impairment loss in relation to costs capitalized	$ 0	$ 0

Leases - Information About Lease on Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Apr. 30, 2024	Jan. 31, 2024
Assets
Lease right-of-use assets	$ 2,943	$ 3,789
Liabilities
Lease liabilities	5,498	6,180
Lease liabilities, non-current	$ 5,979	$ 6,809

Leases - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Leases [Abstract]
Lease term (in years)	1 year
Weighted average remaining lease term (in years)	3 years 1 month 6 days
Weighted average discount rate	3.80%
Impairment charges	$ 0.0	$ 0.0

Leases - Information About Leases on Condensed Consolidated Statement of Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Leases [Abstract]
Operating lease expense	$ 829	$ 1,358
Short-term lease expense	394	571
Variable lease expense	$ 210	$ 355

Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Leases [Abstract]
Cash paid for amounts included in the measurement of lease liabilities	$ 1,628	$ 1,657

Debt and Financing Arrangements - Additional Information (Details) $ / shares in Units, shares in Thousands			1 Months Ended
	Oct. 13, 2023 USD ($)	Oct. 31, 2020 day	Oct. 31, 2023 USD ($) $ / shares	Jun. 30, 2020 USD ($) day $ / shares shares	Apr. 30, 2024 USD ($)	Jan. 31, 2024 USD ($)
2025 Notes
Debt Instrument [Line Items]
Repayments of convertible debt			$ 223,700,000
Conversion rate				0.0249507
2028 Notes
Debt Instrument [Line Items]
Conversion rate				0.03656
Convertible Senior Notes
Debt Instrument [Line Items]
Stated interest rate			1.50%	1.25%
Long term debt					$ 460,000,000	$ 460,000,000
Net proceeds from debt offering, after deducting initial purchaser discounts and debt issuance costs paid or payable	$ 390,800,000
Initial conversion price (in dollars per share) \| $ / shares			$ 27.35
Event of default, option to accelerate amounts due, minimum percentage of aggregate principal amount of outstanding debt				25.00%
Convertible Senior Notes \| Debt Conversion Terms, One
Debt Instrument [Line Items]
Threshold trading days \| day		20
Threshold consecutive trading days \| day		30
Threshold percentage of stock price trigger		130.00%
Convertible Senior Notes \| Debt Conversion Terms, Two
Debt Instrument [Line Items]
Threshold trading days \| day		5
Threshold consecutive trading days \| day		10
Threshold percentage of product of last reported sales price of common stock and conversion rate on each such trading day		98.00%
Convertible Senior Notes \| On or after July 6, 2023
Debt Instrument [Line Items]
Threshold trading days \| day				20
Threshold consecutive trading days \| day				30
Threshold percentage of stock price trigger				130.00%
Redemption price, percentage of principal amount to be redeemed				100.00%
Convertible Senior Notes \| Fundamental Change
Debt Instrument [Line Items]
Redemption price, percentage of principal amount to be redeemed				100.00%
Convertible Senior Notes \| 2025 Notes
Debt Instrument [Line Items]
Aggregate principal amount of debt issued			$ 230,000,000	$ 287,500,000
Stated interest rate					1.25%
Repurchase amount			227,500,000
Issuance costs attributable to company			$ 2,600,000
Long term debt					$ 57,500,000	57,500,000
Initial conversion price (in dollars per share) \| $ / shares				$ 40.08
Effective interest rate					1.91%
Convertible Senior Notes \| 2025 Notes \| On or after July 6, 2023
Debt Instrument [Line Items]
Redemption, threshold trading days immediately preceding maturity date \| day				41
Convertible Senior Notes \| 2028 Notes
Debt Instrument [Line Items]
Stated interest rate					1.50%
Issuance costs attributable to company	12,000,000
Long term debt	$ 402,500,000				$ 402,500,000	$ 402,500,000
Effective interest rate					2.13%
Convertible Senior Notes \| 2028 Notes \| On or after July 6, 2023
Debt Instrument [Line Items]
Redemption, threshold trading days immediately preceding maturity date \| day				61
Convertible Senior Notes \| 2025 Capped Calls
Debt Instrument [Line Items]
Net cost incurred to purchase capped calls				$ 35,700,000
Convertible Senior Notes \| 2025 Capped Calls \| Capped Calls
Debt Instrument [Line Items]
Initial strike price (in dollars per share) \| $ / shares				$ 40.08
Cap price (in dollars per share) \| $ / shares				$ 61.66
Number of shares of common stock covered by capped calls (in shares) \| shares				7,200
Automatic exercise period for capped calls, trading days \| day				40
Convertible Senior Notes \| 2028 Capped Calls
Debt Instrument [Line Items]
Net cost incurred to purchase capped calls				$ 55,100,000
Convertible Senior Notes \| 2028 Capped Calls \| Capped Calls
Debt Instrument [Line Items]
Initial strike price (in dollars per share) \| $ / shares				$ 27.35
Cap price (in dollars per share) \| $ / shares				$ 42.90
Number of shares of common stock covered by capped calls (in shares) \| shares				14,700
Automatic exercise period for capped calls, trading days \| day				60

Debt and Financing Arrangements - Net Carrying Amount (Details) - Convertible Senior Notes - USD ($) $ in Thousands	Apr. 30, 2024	Jan. 31, 2024	Oct. 13, 2023
Liability Component:
Principal	$ 460,000	$ 460,000
Less: unamortized issuance costs	(11,333)	(11,970)
Net carrying amount	448,667	448,030
2025 Notes
Liability Component:
Principal	57,500	57,500
Less: unamortized issuance costs	(464)	(597)
Net carrying amount	57,036	56,903
2028 Notes
Liability Component:
Principal	402,500	402,500	$ 402,500
Less: unamortized issuance costs	(10,869)	(11,373)
Net carrying amount	$ 391,631	$ 391,127

Debt and Financing Arrangements - Interest Expense (Details) - Convertible Senior Notes - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Debt Instrument [Line Items]
Contractual interest expense	$ 1,540	$ 879
Amortization of debt issuance costs	608	455
Total interest expense related to the Notes	$ 2,148	$ 1,334

Deferred Revenue and Performance Obligations - Deferred Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Increase (Decrease) In Contract with Customer, Liability [Roll Forward]
Deferred revenue, beginning of period	$ 228,161	$ 209,051
Billings	106,604	96,000
Revenue recognized	(111,172)	(103,246)
Deferred revenue, end of period	$ 223,593	$ 201,805

Deferred Revenue and Performance Obligations - Additional Information (Details) $ in Millions	Apr. 30, 2024 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Future estimated revenue related to performance obligations	$ 388.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-05-01 \| Short-Term Contract with Customer
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Future estimated revenue related to performance obligations	$ 135.0
Revenue, remaining performance obligation, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-05-01 \| Long-Term Contract with Customer
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Future estimated revenue related to performance obligations	$ 273.4
Remaining performance obligation (as a percent)	70.00%
Revenue, remaining performance obligation, period	12 months

Common Stock and Stockholders' Equity - Additional Information (Details) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended
	Oct. 31, 2023 USD ($) $ / shares shares	Apr. 30, 2024 USD ($) purchase_period shares	Apr. 30, 2023 USD ($) shares	Jan. 31, 2024 shares	Jan. 31, 2023 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Treasury stock (in shares)	2,331,002		0		0
Stock repurchased (in USD per share) \| $ / shares	$ 21.45
Total repurchase price \| $	$ 50,000
Number of shares authorized for grant (in shares)		36,092,962		31,519,553
Number of shares available for grant (in shares)		19,846,670		17,178,454
Options granted (in shares)		0
Aggregate intrinsic value of stock options exercised \| $		$ 500	$ 12,100
Unrecognized compensation cost related to unvested stock options \| $		1,300
Stock-based compensation expense \| $		$ 32,940	27,545
Shares purchased (in shares)		0
Treasury Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Treasury stock (in shares)		2,331,002		2,331,002
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)		0
Unrecognized compensation cost related to unvested awards, period for recognition (in years)		1 year 7 months 6 days
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to unvested awards, period for recognition (in years)		2 years 4 months 24 days
Unrecognized compensation cost related to unvested RSUs \| $		$ 239,100
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to unvested awards, period for recognition (in years)		1 year 7 months 6 days
Unrecognized compensation cost related to unvested RSUs \| $		$ 19,400
Vesting period (in years)		3 years
PSUs \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance condition (as a percent)		0.00%
PSUs \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance condition (as a percent)		200.00%
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant (in shares)		4,297,539
Offering period (in months)		24 months
Number of purchase periods within each offering period \| purchase_period		4
Purchase period (in months)		6 months
Purchase price as a percentage of fair market value of stock on the offering date or the purchase date		85.00%
Stock-based compensation expense \| $		$ 1,700	1,800
Amount withheld on behalf of employees for future purchase \| $		$ 3,100	$ 3,700
Shares purchased (in shares)			0

Common Stock and Stockholders' Equity - Shares Available for Issuance (Details) - shares	Apr. 30, 2024	Jan. 31, 2024
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant (in shares)	19,846,670	17,178,454
Total common stock reserved at period end (in shares)	39,739,271
Stock options, RSUs and PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding stock options and unvested RSUs outstanding (in shares)	15,595,062
Number of shares available for grant (in shares)	19,846,670
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant (in shares)	4,297,539

Common Stock and Stockholders' Equity - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	6 Months Ended
	Apr. 30, 2024	Jul. 31, 2023	Jan. 31, 2024
Number of Shares
Outstanding, beginning balance (in shares)	4,875,025
Granted (in shares)	0
Exercised (in shares)	(41,875)
Canceled (in shares)	(12,289)
Outstanding, ending balance (in shares)	4,820,861
Vested (in shares)	4,718,085
Weighted Average Exercise Price
Outstanding, beginning balance (in dollars per share)	$ 10.29
Granted (in dollars per share)	0
Exercised (in dollars per share)	6.94
Canceled (in dollars per share)	13.30
Outstanding, ending balance (in dollars per share)	10.31
Vested (in dollars per share)	$ 9.88
Weighted Average Remaining Contractual Term
Outstanding	4 years 1 month 6 days	4 years 4 months 24 days
Vested	4 years
Aggregate Intrinsic Value
Outstanding	$ 50,306		$ 68,151
Vested	$ 50,064

Common Stock and Stockholders' Equity - Restricted Stock Units and Performance Stock Units Activity (Details)	3 Months Ended
	Apr. 30, 2024 $ / shares shares
Weighted Average Grant Date Fair Value Per Share
Grant attainment percentage (as a percent)	100.00%
RSUs
Number of Awards
Outstanding, beginning balance (in shares) \| shares	7,412,056
Granted (in shares) \| shares	2,924,763
Vested (in shares) \| shares	(783,267)
Forfeited or canceled (in shares) \| shares	(342,977)
Outstanding, ending balance (in shares) \| shares	9,210,575
Weighted Average Grant Date Fair Value Per Share
Outstanding, beginning balance (in dollars per share) \| $ / shares	$ 31.08
Granted (in dollars per share) \| $ / shares	21.63
Vested (in dollars per share) \| $ / shares	30.73
Forfeited or canceled (in dollars per share) \| $ / shares	29.79
Outstanding, ending balance (in dollars per share) \| $ / shares	$ 28.17
PSUs
Number of Awards
Outstanding, beginning balance (in shares) \| shares	541,992
Granted (in shares) \| shares	781,813
Vested (in shares) \| shares	(9,050)
Forfeited or canceled (in shares) \| shares	(3,280)
Performance adjustment for 2022 PSU Awards (in shares) \| shares	(529,662)
Outstanding, ending balance (in shares) \| shares	781,813
Weighted Average Grant Date Fair Value Per Share
Outstanding, beginning balance (in dollars per share) \| $ / shares	$ 35.08
Granted (in dollars per share) \| $ / shares	21.62
Vested (in dollars per share) \| $ / shares	41.17
Forfeited or canceled (in dollars per share) \| $ / shares	41.88
Performance adjustment for 2021 PSU Awards (in dollars per share) \| $ / shares	34.98
Outstanding, ending balance (in dollars per share) \| $ / shares	$ 28.14

Common Stock and Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 32,940	$ 27,545
Cost of revenue
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	1,756	1,876
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	11,222	10,101
Sales and marketing
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	7,947	5,951
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 12,015	$ 9,617

Net Loss per Share - Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Numerator:
Net loss attributable to PagerDuty, Inc. common stockholders	$ (24,056)	$ (12,218)
Denominator:
Weighted average shares used in calculating net loss per share, basic (in shares)	92,876	91,522
Weighted average shares used in calculating net loss per share, diluted (in shares)	92,876	91,522
Net loss per share, basic, attributable to PagerDuty, Inc. (in dollars per share)	$ (0.26)	$ (0.13)
Net loss per share, diluted, attributable to PagerDuty, Inc. (in dollars per share)	$ (0.26)	$ (0.13)

Net Loss per Share - Anti-dilutive Securities (Details) - shares shares in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Shares subject to outstanding common stock awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	14,813	15,674
Restricted stock issued to acquire key personnel
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	25	63
Shares issuable pursuant to the ESPP
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	267	295

Net Loss per Share - Additional Information (Details) - 2025 Notes shares in Millions	1 Months Ended	3 Months Ended
	Jun. 30, 2020	Apr. 30, 2024 shares
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Conversion rate	0.0249507
Potentially dilutive securities (in shares)		7.2

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Apr. 30, 2024	Apr. 30, 2023
Income Tax Disclosure [Abstract]
Expense (benefit) from income taxes	$ (193)	$ 106

Geographic Information - Revenue by Location (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 111,172	$ 103,246
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	80,792	74,834
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 30,380	$ 28,412

Geographic Information - Additional Information (Details) - Long-Lived Assets - Geographic Concentration Risk	3 Months Ended	6 Months Ended
	Apr. 30, 2024	Jul. 31, 2023
United States
Concentration Risk [Line Items]
Concentration risk, percentage	71.00%	73.00%
Canada
Concentration Risk [Line Items]
Concentration risk, percentage	22.00%	20.00%
PORTUGAL
Concentration Risk [Line Items]
Concentration risk, percentage	5.00%	4.00%
United Kingdom
Concentration Risk [Line Items]
Concentration risk, percentage	2.00%	2.00%

Subsequent Events (Details) $ in Millions	May 30, 2024 USD ($)
Subsequent Event
Subsequent Event [Line Items]
Stock repurchase program, authorized amount	$ 100.0

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