PagerDuty (PD) 26 Nov 242025 Q3 Earnings call transcript

Good afternoon, and thank you for joining us to discuss PagerDuty's’ Third Quarter Fiscal Year 2025 results. With me on today's’ call are Jennifer Tejada, PagerDuty's’ Chairperson and Chief Executive Officer; and Howard Wilson Chief Financial Officer.

Before we begin, let me remind everyone that statements made on this call include forward-looking statements based on the environment as we currently see it, which involve known and unknown risks and uncertainties that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. These forward-looking statements include our growth prospects, future revenue, operating margins, net income, cash balance and total addressable market, among others, and represent our management's belief and assumptions only as of the date such statements are made, and we make -- and we undertake no obligation to update these.

During today's call, we will discuss non-GAAP financial measures, which are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. and measures GAAP our available between release. earnings reconciliation non-GAAP is financial in A these factors XX-K/A the included and the on most made Securities information Further other with including Commission, as results we with our differ other and filings filings Exchange company's filed that to materially well the SEC. are Form in recently make the as financial cause could subsequent

call With over will that, the to turn Jennifer. I

revenue delivered for Thank our quarter, of a a year-over-year you, increased PagerDuty Good XX% $XXX non-GAAP the us Tony. expanded operating guidance to QX above million, margin fourth year. and over for ARR operating consecutive in recurring the growth solid thanks last $X XX% revenue new well joining non-GAAP increased and Revenue and to increase quarter was with X%, XX%. today. growing of afternoon, Net quarter. income ranges. annual million Total

see retention on not reacceleration, number while in is QX to conversions. on large segments growth for stabilization and all the pleased an had are We 'XX. And we deal focused opportunities of said, FY lost, particularly improvement, acceleration across they were these That delay room will ARR improving defer. We remain across with large there quarter, unusual into the board.

joint is longer of more adoption, a a us agreements are represent the we multiproduct and duration contract enterprise aligning and compound our vision multiproduct top including over resilient encouraged for these future in customers with period. total the retention, multiyear, benefits Nonetheless, by growth. quarters net improvements indicators, in priority key manifestation a on dollar-based commitment future pipeline Converting as several a

in the to net improvements retention XXX%. the we agreements Enterprise and for of year sequential laid leading Commercial dollar-based comprehensive retention, gross The secured in both foundation early

and cross-sell. the driven our incremental has In Ops ARR. $XXX,XXX more Service to accounts upsell number and Automation approximately by risen ARR XX%, by increased AIOps, capacity has of the Customer As greater product ramped contributed year, XX% throughout with than than QX,

quantified research with our benefits Forrester the October, Operations the of In monetary enterprise customers. Cloud through

broader XXX% payback adopt As return -- year. years, products more they with over XXX% on significant across enterprises realize of average and X of This returns. investment platform, less than nearly financial to a enterprises high an enables period adoption achieve X availability multiple a

Operations the to across innovation during value the development the Product enhancing deliver the platform, quarter Cloud. continued customers realize further from

integrated generative including take automation management to We is offering, are now response, modernization platform cost the addressing to summarize automate expedite center triage, AI CIO operations several across transformation, Advance, PagerDuty time instant and imperatives, and the our and standardization. reduce communications action. incident

common the Our with with to leverages experience manage entire This answer proprietary incident an an from life Advance extensive PagerDuty generative AI questions. context recommendations data assistant chat and Slack along teams. of an cycle, make or enables Microsoft unified new built-in incident model, to within teams

quarter It to our in paid customers. the PagerDuty Advance was encouraging first close

focus. The operations precision, which modernization by enhances significant Global and accelerating is isolating generating version networks contact supports latest providing by the effectively center of resolution. signals comprehensive version heightened switching deliver grouping visibility, new Our neural of minimizes alert to console intelligent and leveraging operations interest

diagnostics, well investing largest container IT dev more includes in automation and we common and automate and consolidating This runbooks log of that enhancements management. Recognizing templates These repetitive manual, time-consuming address tasks many our are as such library our QX. management database activities. customers as in automation expanded as that and standardization, workflows

third the as among Operations in Recently, Cloud, Landscape GigaOm consecutive and Radar the analysts new PagerDuty Solutions for Forrester's its we to capabilities recognize XX Industry our adopt included Top AIOps. AIOps leadership the were product annual for named and existing as in continue Report our AIOps. year the customers especially GigaOm a of leader

trends data-driven the AIOps standards way as are analytics decision-making corrective for set These operations. solutions. for automation new paving IT vital long-term pace advanced accelerating preventative actions and the in are and while and precision of

segment strength a Software in particular that The believe grow emerging continued From core Financial of FY the higher above source average, and geographic Technology, for growth is to perspective, and 'XX. a Enterprise a with verticals: as EMEA Services is Telecommunications. in we our building stability foundation

continued our a X-figure high-value the during consistent segments trend within Customers of expansions quarter.

partnership The digital aligning effectively. Operations expansion This own it through for PagerDuty leading multiyear its to build the its a company culture. Cloud with continue both For renewal Scaled organizations a agreement. renewal example, partnership, company the allowing with leverages and Ownership, it travel strengthens collaborating strengthened long-term Service and

also firm selecting its us services incident response as PagerDuty, with their financial top-tier A expanded relationship platform.

this to in elevated platform. nearly unique ability years, central and support preferred marks distributed sixth expansion X to PagerDuty period. Our the the over their both teams This organization increasing by become Xx users with

its through Incident firm of PagerDuty last expanded Incident year, as Continuing workflow. products Service Customer Management cybersecurity the transform use a to in to their innovation, has and integrating AIOps, lead such twice Management

to risk resulting reduce processes, costs, business. outages, need the their improved was quicker prevent and tools resilience. decision updates resolution to operational customers reduction standardize on provide multiple process, moving a overall in and customer and from our The to operational reduced PagerDuty manual driven the away By and efficiency by increase standardized

quarter, Rukmini Chief our Security SVP as Their wealth of the will positioning the recently we Engineering. to past us strategic two Rukmini continue the Parekh, Chief and most a at Officer. where of During of Reddy, enable Delphix, brings contributions a Operations years. Engineering Engineering; Cloud Information leaders Slack the Pritesh Security the experience, new as asset customers. for Officer all joins SVP welcomed PagerDuty: for Pritesh of from Trust X-plus to and was us SVP and he

XX women in Workplaces Best a their top as medium us small designation. for Fortune's recognized company and

Targets commitments validation to sector nonprofit And of Initiative XXX received continue the also operational Impact customers, and QX. Based progress our We our emissions. carbon as from we to with for Science reduce supply the chain make over with from

and by for retention, high-caliber We rising 'XX sales with positioned pipeline. well supported growth are exit hiring a to ARR robust FY reacceleration, poised

of Following our to fourth into to strong focus primary net momentum 'XX. deliver a -- ARR quarter carry several quarter to this is is FY and fourth stability, new deliver strong quarters

I for long-standing to to shareholders, seeing and AWS our of I look where Matt week, want I'll many and forward you continued keynote during at our speaking co-innovation. partners support. thank be customers, employees their re:Invent about next Garman's partnership

Howard your questions. turn to I'll that, the call look With and to forward

Unless this operating references our are Thank you, call. release was Jen, that on and non-GAAP call. good otherwise afternoon's to basis are the and posted to all everyone results joining in a us expenses on and GAAP reconciled stated, day the results to earnings before our

solidify visibility motion a were and QX to segment. our contribution and from for our This In robust the quarter, third expansion Commercial stabilize success, pipeline, along key with building from margin we improved enterprise the quarter. the strong continued highlights operating

Revenue below been for XX% We international $XXX year-over-year. year the in million. total from was we XX% in ago was of up rate year-over-year quarter the anticipate similar XX% exiting period. million, from the The to Annual XX% slightly up have revenues, QX grew X% QX, growth toward. tracking $XXX a rate revenue contribution recurring

learn segment, expectations As becomes on adjust our our and the to continue seasonality. typical Enterprise focused we regarding business increasingly

enterprise builds. Our momentum precision in improving handling is as large deals

from full in X% with line grew XXX% year. QX last expectation Customers XX our $XXX our the million, annual a remained Similar dollar-based ago. and DBNR our quarter, to retention revenue net delivered up fiscal over $XXX,XXX for points Commercial We expectation in above above segment. to Enterprise spending recurring year

Enterprise offset over approximately Total paid companies relatively compared of decline flat paid XX,XXX of of in by Free Commercial year. XX% was to to as grew QX a on an platform increase accounts. modest in customers XX,XXX, last remained year-over-year the growth our number at and

$XX target relative in QX gross expenses. our XX% income consulting XX%, outperformance the The to was of last million to was same XX% revenue Operating compared delays or XX% and and revenue our of to end marketing guidance $XX driven starts high or timing quarter million at XX% headcount by of of in year. range. margin was the

of or the of from or was In revenue, million cash and quarter, free operations cash flow XX% XX% of flow revenue. million $XX terms for cash $XX was

free points. expect ahead a margin to full by of year of operating be cash for margin percentage to continue We the couple our flow

Turning investments. In amount We XX% On QX, and cash balance increase ended XX plan. we X% QX, of be And sheet. of million to in approximately a below authorized we the million, the growth $XXX the equivalents shares a ago, slightly months' respect X.X total to cash, quarter remained trailing from basis, an target. available. billings repurchased at trailing end to million be million were the with million X%. of With billings repurchased months' $XXX repurchase quarter, year to compared $X.X to the $XXX anticipate our XX our

was At XX approximately million. amount, recognized the expected Of the over $XXX approximately next is be end million or $XXX to RPO months. XX% of QX, total this

as less the RPO FY a months. to have of total with current year over on $XXX than reminder, basis XX the like-for-like been a our term 'XX, which period, 'XX, of disclosure As original RPO would QX includes an FY increased definition contracts Applying million. ago XX%

Turning to our guidance.

the share X%, the quarter per million, range $X.XX of fiscal million PagerDuty, This and growth rate to XXXX, representing fourth we Inc. to $XXX.X the of a to of attributable operating income $XXX.X implies XX%. in to in of X% margin For diluted revenue expect range $X.XX. of an net

are This PagerDuty, $XXX.X net are X%. increasing fiscal XX% guide previously Inc. $X.XX to to updated of year million $XXX and for to to million our range $XXX raising $X.XX prior to per growth income to the attributable $X.XX of to with operating million, of respectively. compares to and an XX%, compares diluted the revenue we of And $X.XX. million. we expectation representing a of the of $XXX.X share implies full margin range our an rate XXXX, provided This For midpoint

have Commercial on stabilized DBNR Reflecting we and far, maintained segment. the ARR in headwinds year steady growth the growth at moderated so XX%,

the have margins XX% strong operating rate provides ARR pipeline. to while a mature continuing and growth Additionally, with significantly fiscal a for our we year. Enterprise the foundation expanded our grow upcoming Exiting year

the I will up open call that, With Q&A. for

going Josh, are you queue to our...

you. Sanjit to going with start Instructions] [Operator we're Singh,

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sort half. better. of and the Okay. acceleration were trended, the Hopefully, expecting in we Jen, back has think how we that's like about year when

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hyperscalers growing double the in growing digits. double double The digits. you solidly If in the platforms solidly digits. the all get in Observability guys the growing DevOps

ARR on about at when What think least, guys of, the playing pretty so revenue, where And with guys single-digit adjacent do think markets and you sort XX%. there you to? disconnect that still you of we're like territory the close you in some high is are are versus why

I Yes. in for first a all our Well, historically see headwind. all, including segments, the were say, stabilization Sanjit. net bit positives We improved $XXX,XXX-plus thanks which of of there mean, We retention quarter. I in Commercial, across the question, lot and dollar-based a strong a did volume of been cohort. saw would has transaction

grew I'll to quarter. And Enterprise: Customers -- were in services over to continue you, the financial tech, well also be very growth. sorry, above in rates continuing win verticals just The telco, And more the XX% good. than Enterprise, competitive spend $XXX,XXX who remind grow very we grew see strong. and average is XX and

say, improvement would is this in where large like the deal quarter, the see would to I future one I conversion. area in

So defers the which did saw past they unlike deals quarters, of push. large but handful some of are we They lost, of reacceleration. that defer, not a many

I to having headwind the of were need as Commercial even how the And see less to becomes that's think returned said see But less stabilize quarter business that, we business. you this at look pleased really to and growth. and growing and Enterprise segment that a to

of to anticipate sort PagerDuty I ultimately, Advance, the what when PagerDuty potential that. talk know advanced But capabilities? No, if you're strategy, Advance. customers out do Incident customers super fuel monetization trying could sort little bit want you to a about And I I you it's Management on how get that's and the pricing context. then, appreciate Customer uplift to lay or you -- adoption when like for uplift take of customer the just early. Service ARPU

Sure.

learning has and data as our and we ability So platform proprietary reminder, seed leverage a us capabilities for strength for business make on differentiator like in platform. machine recommendations built is least a not for years, deploying for our chat platform's now features generative significant us the been sort also moat a that have that model of been in to continued And of creates Cloud. which Operations the in AIOps, AI the AI to a of pretty product new for many terms a across our to which

So things like that where, in right, the many, changed, it really what's as to And when service you several would The can almost be asking time take starts, know, many out. minutes, money. incident simple is immediately. maybe incident can historically, platform an hours platform response, that figure

in number involved of time I think that continue core to and customers. about associated itself. when entire it generative the that platform we attach to with an triaging but to drive the to the also So incident, incident usage AI, need through and our these across AI generative Incident reduce to be reduce land in think AIOps to people resolving opportunities Management it's simply start that features the

And then it the AI operations a for is biggest AI opportunity core as single customer. within use generative to Cloud Operations relates probably case the

in proliferating customers customer. operational create be deploying the RAG in Our and at are own Agentic to associated software. launch with use it's initiatives And agents much needs the technology have AI and faster those be and than scale a them. see to deploying risks all to They LLMs. of monitored We're of managed, models. traditional risk. needs That They're starting their

over the those the will use And give all AI, but positioning the Operations use that, I represents cases. And GenTech both time, customers' some differentiation case of a opportunity and in growth I that so Cloud. across think, platform, a things competitive our on the us power strong think, generative of through use do we because around also core multiproduct pricing

Yes. model covered just the area you around specific and And Sanjit, our there. maybe using I follow we're generative can AI that on that the

to free general a to So that to motion of option AI capabilities. they And off opt the we months started like, when amount we Advance. PD credits, to and with is few customers the out try have the if actually start the them -- allow you to this we back, that allowed get in on the availability plans moved certain a certain that generative

first actually beyond the have a really like. able led from this customers contracting had to allocation, had quarter. response customers be that's we've that, free And good with actually you the on We've to customers and us. contracted We use that to if our ongoing

at they're Operations linked means stage, relative because not capability AIOps using Incident really across platform a And Automation, and to that have only across who across to this the that someone using. but that to is Incident it's It they access Management, Cloud the is responds the platform. Management,

a So as they we have priced products that factor of not have. independently the that and

Baird. to going hear Rob And Oliver next, with we're from

you Can hear guys me okay?

Yes.

Yes.

me. A called -- which enterprise for on just top you couple One, conversions, customer the out. Jen, the large

experts really in need all of in We're I things, be to it's to think, uncommon challenging. in salespeople right procurement, and also, as these now. Sanjit not alluded earlier hearing legal,

wondering commonalities can like the out, or for which you any top call like ROI if deals in clear. these thing to is example, juxtaposed there's say, when absolutely hear particularly with I we was the like, is ROI Forrester anything the just crystal having be study,

I then So Howard. And helpful. color those they deals? pushed what hearing why were around had And would be you're for any follow-up perhaps kind of around a

Yes.

I Rob, think I this kind environment, of think, in market right. you're

feedback executive sure helping process have it's that and through very we we You sponsor there. economic buyer process that, tell their through own get a perfect. reconversation, And perfection, et I every of plan from then hurdle, get to you the our and a or have making cetera. value proof almost of nobody's would But for perspective, strong

been last of the did look $XXX,XXX quarter that I even quarter. as over the with performing I over And several this said, And quarters. customer in consistently that transactions And that large very our our still cohorts, number XX% we in we've like grew pretty there $XXX,XXX customers when the consistent. over spend us at fact,

just some those of the future. out the So deals was of into largest them just larger we're large, pushed getting It done. the

about people generative said Having AI, go we've I beyond, gotten response significant and new about positioning, And feedback Service Customer are they to which competitive AIOps, around savers very really really call, would excited time what good Ops user that, about. features in incident the delighters process.

said generation. Having we're to push around, going continue that, improvement for to pipeline one,

seen strong close We're into sure that strongest the many Two, these So rigorously pipeline many, to coming we quarters. we position I've to in quarter a come commit pipeline. closed. be strong pipeline also when deals to managing with with into are just make in very that the very we QX

in And the executive lot spending engaged make more up new really, whole last new -- sponsor anticipate crop sponsorship. has these we of any time our prospects and sales challenges so our place, sure a then try can just during a We have their than is, team the got that I'm deals. put that into got different executive personally program process. on we executive in across our and team to customers purchase relationships hands the may We've

helpful. -- a appreciate on and to you program color Howard, And the that, executive no I as quarter. good well. mean, the on nice follow-up issue I I and guys all That's beat Great. just that. at have corollary been with sponsorship think Yes, prudence.

year an it the had up think, for up range that maybe tightened. I of low to came sort little It end, a guys, at but full come opportunity You bit.

how which and Jen Or some to there. and talking I totally there moving we FY understand maybe fine deals, it. around and conservatism should about, perhaps anticipation 'XX that? that? about to just to think more is I like to maybe were wanted Just understand, with some any puts the just Again, wanted of those takes of

Yes.

-- I've try prudent view are to -- a approach Rob, environment, within able this put wanting because, make in that to sure on really is we that my have guess, I them. confidence and we to behind this obviously, high numbers So take we're out

the we from already have if the a you taken we So account into have perspective. like, -- deals that both subscription

Some transactions business from Services of based in our and on our month-to-month comes variability delivery. from our Professional

quarter, So what the in look be can we what had actually done be or given the the period. sequence to period, at, over delivery this holiday

the like we then sometimes automation, the And can another create deals in have around process variable our variation a self-managed revenue.

So when were lens. of a factors for to glad full we some move prudent QX able up. it that with into on where to I all we that, pass of the midpoint take account, me range gives those year, that were the same But looking we're at beat

going Koji Bank hear we're Ikeda Next, America. from to from of

and questions dig level. it A some sort to wanted bit me couple on the deferrals when to a of the compounding gets little a bit fact from think effect deferred I back normalized deal in of deals me. get doesn't it in the about that I if here more little worried closure

so the in sometime to deferrals back of whatever what's be? to deal may get that And you're next, them seeing you're confidence going don't that it the giving closing able to or be or know, months that today, kind quarters you I

we were well like very our Well, the something would of said, them. closed this over many also say consistently I we've And transactions strong. $XXX,XXX some that that like what I already above -- And past have quarters. done is

have largest deals apart than period that lot a potentially into time. multiple anticipated over of longer been some So had took transactions a it's or short broken our of just just we

customers now able we're to really to game flexibility do as long they to trying the way the And are the we've of right past, relationship. play are and in to terms the business demonstrate business we do our to so in said --

through long-term would our the our upsell improving last more to on us a demonstrate that engage of thing I challenging the gives multiyear. what macro we've which and over the is, other opportunity The even multiproduct relationship, quarters, several which backdrop cross-sell to been in customers pretty has period. in say a been execution multiyear deals, ability

number have And those we solid expanded past couple period, didn't so X-figure many expansions times even large of the larger in with some saw years. customers, deals over of who of a while close this

lumpy you remember, grown a has And if pretty disciplined expansions, past business that large our well Enterprise and just is core So volume in deals. of way. through business in like the still performing not well a

opportunities improvement. In terms for of

around of management. ramp We We're upgrading looking focus program. pipeline to executive efficiently I in our more combination sponsor we enablement or are our going improving continue mentioned can to at management. through effectively rigor how also and capacity on more a

We have have leaders have new a quarters of in for ramped that seat themselves. couple of a now number and theater been

strong so have in the have lot in I as is confidence front we And which, ability pipeline team's convert said, very I a the of to of, quarter. that this

it. Got Yes?

made last add investments a would and just Koji. this of number leadership of I jump in that, to in year. sales We've terms

have North and build a the for the capability. of new in last in of theater lead months and a America helping we've enterprise they're hired certainly terms for for kind strong making X sales We EMEA, And sector. leaders, public difference

pipeline the for into we next at look the just what as was I the pipeline, of than XX% higher when start for almost year, at QX year, QX next for is numbers, for year. go last it And QX example,

on against a those gives into larger us the deals. greater at execute what So pipeline value, that's certainty building to that future ability high quarters

Got it.

Now pipeline. that's a on nice the data point

model, follow-up essentially looking Jennifer at a target it. here deck, your are or Howard, to and question operating maybe operating the I'm the is your you at guys so for whoever wants take model. And target on in slide

guys I guys so am there's you And medium accelerate do, potential for believe here over sometime TAM term. growth the do that in I the to the you a addressing. believer here are

we upside the I into target while and Are for how model of incremental margins at Or peak growth? this be at opportunity you essentially kind balancing And do so operating could we invested balance? how you? do growth of about ahead think guess with about being think a that

with of that has X Enterprise, can saying been up kind into I'm which backdrop the around our our have, where really significant a just gone across enterprise all in business, transition encouraged tough I now split micro. a But Why segments. Cloud. think, through segments: we've by -- Operations a Remember the don't by of I the we business pretty start you the strong stabilization narrative

rep perspective, executing is to prove I have we've we're going of than now past. we're refined win out selling market. a start profile our competitive that, Solution seeing better think so standard through And strong from itself in we selling way And strategic we -- that our really rates. the

we same improve the continuing quickly we can ramp how in can to our we At ramp time, that believe capacity and efficiently how capacity.

So you we are focused efficiency we as growth intend opportunities we're profitable business a to reacceleration. and the business. on always be more also for know, to But across looking drive

of we're starting stabilization to of retention the rates business. the a end and in the space, In that return I to see, better small commercial even Commercial, growth think,

our those but optimism ability margins next effectively. reaccelerate to so And give to growth around manage us year, into also continue operating

let And there. add I'll Howard, you

Yes.

the to said, Koji, think, just opportunity see that growth. what still strong, we opportunity Jen market the see So is build we reaccelerate on and to I

And so basis. when certainly I that margin close think to annual an about our on model, operating getting we are long-term

to balance at would expense progress profitability. And look being feed able expanding with margins year, the want we the growth. continue terms so but at of to our not even make in We continue do of next into to how to we operating growth

in to, invest more fact, capacity has we after have in through economic sales the tougher because year So ability in business in go even the confidence market. been in continue environment, a in to and this what we invest

Next, we'll Jeff hear Rhee Craig-Hallum. from Van at

congrats. my add I'll Okay,

You macro-driven a what's as called spot. Would what's sales a going on as that you improvement. out and being driving out bright bit execution? the EMEA really call more Talk about

he's that lot across new standardizing think in leader generation really I demonstrating rigor and macro the theater, motion a Now, way a easing is as on we in of in the well. the segments real go-to-market pipeline that market. a is have and and results a And brought EMEA focus our there do

the segments. large first about so two said both we're easy we've execution And excited and quarters and Enterprise potentially It's macro in Commercial good the across together, several those really an that EMEA. time things

Yes, no hear. of No glimpse to I gave lines, great doubt. last think 'XX. an that's those -- into early sort along you What and Yes, quarter, doubt.

I and XX%. think you of billings said over growth ARR

I at color, at little be thinking just think, we fringes, Any about point? bit be the how a margins. commented to even about share 'XX about willing Howard, you this other you'd should

what the we've little those above the about shared, to the above timing XX% But and continuing given ARR haven't year next margins. our rate operating exiting about. growth is growth. but acceleration our line time philosophy do to a growth really are to think ARR how bit variable, on piece. fixed at Obviously, increase we any parameters Over expand into XX% year, that of Yes. and certainly is think we We're this also

how we deliver the our professional a been growing around help frame out. Just as longer-term as course, portion fall will more that But business a reminder, have do into that of to opposed that services short-term of you our -- our whilst customer sort are services could services. is services mainly revenue of base we subscription, technical that's complexion

me. Then Okay. just for All right. last

at look to drivers for potential employment is much business, weighted drivers can sector? heavily How the we that to the And waiting mean, you accelerating to are we improve? I in much when versus side, heavily, do talking tech the think how that On you about how for control to commercial growth? employment

mean demonstrating Jeli, that, see Yes. we stabilizing. at where to some customers Incident adding in are see looking can value do. benefit are improve. We're is what I really of not our better proposition indicators leading we've Management constraints. of price-sensitive particularly We're And the around that our retention. to most waiting they -- parts the the nice we're and for automation that clear made the very from exposed seeing market, our Commercial capital segment, environment employment just additions postmortem to really to be experience, product, SMB, it's including to sort VSB of But chat and and that the

as have which win well. very to actually we're we where strong sales see in motions competitive rates, is Commercial, seeing And assist nice

from focused not see a in business startups. digital, We're true the very on like in vertical you standpoint our smallest we the find That that's mid-market So more -- segment. in small lot tech there. completely can any segment, a be would

other The startups, native thing another which doing that's cetera. space funded which and well, travel generative crypto, subsegments is add in online like very we that I see in et is hospitality, would strength well are e-commerce, AI

So the Commercial and customer of a vertical even there. of a have segment, we lot ton not quite within concentration diversity

look little we're add, getting products Operations basis. we base, a applies at but everything even would Commercial balance on that are that bit Jeff, we in not our now of portfolio the that consumption when user segment. the is is terms have of Cloud, And in I a thing One a product across

the does some to that direct remove base employment growth. relationship user So or of

we're Instructions] TD to Next, Cowen. Andrew Sherman with [Operator turning

in from attach quarter. strong, The number. increase? healthy expect ARR order net behind to pipeline? driving which new what's kind they're was we and of And XX% continue bigger through products Congrats And the to that the the the even as deals can should Maybe new of help within rank see products that rates strength a get those? working

expansions And along get the deals seeing seeing, even through adds the product I'll yes, multiple a can we're bigger help of that start services. as pipeline. we're Well, with, working new they're that with lot

the seed executing. the but new the so way attach is team opportunities keeping find contract, the to and base of attention important close part And how to -- not just is our products throughout of existing really we within at course paying renewal, rates

to sales that the in really frameworks applying I remarks I they know standardizing talk or force have mentioned and incident about teaching These prepared from one we we're standpoint a think management like go-to-market all their of -- enabling These customers things and initiatives is we that the that budget know their attached particularly our initiatives or enterprise modernizing automation are transformation op are practices. centers. mid-market, funded, to. CIOs, to have in

big go can a us you of that, AIOps So and we in and do can help you part how let we show is say, that.

to operate your Customer customer-facing Agentic, the are of together Ops have about ability types way meaning the bringing are of is pass tools And that the all some instance seeding automation these is that I agents, meaning teams as Automation trial you about making And some the to as we're along as across well. to understand agents, engagement or to products, you customers back curiosity in you well, of features people, solving generative status user driving have business. and improving the different and islands sure which, for our trying either information, or think, Service of is AI incidents.

It's obviously And Enterprise as now. great. the when that mid-market up? of was Does SMB points can the Howard, hear model NRR does But flow out include ARR great SMB back XX last or drag drop That's NRR And lower higher. such well? of that XX% is QX. that to not your enough

dollar-based about above we with was when were Yes. the speaking million. Enterprise, $XXX revenues the Yes, so net companies really retention

a focused of it's bit so spoken how an little companies about we now is those Enterprise. because So expansion Enterprise of team we've about on our the previously sales think when

So great see. to

upper the previously what we've seen mid-market. end of incorporate And being so as that would

includes look we're On the from which to quarter. at this the Commercial to had segment, see -- if I that SMB starting SMB,

been X now negative had growth quarters That's quarter-over-quarter. year-over-year. You that of out flattening know we like

we're the that So from getting a point where being headwind reduced. to is

So see good able Enterprise leverage growth starting That us overall will the terms rate. puts place Commercial to certainly to then grow the being in in in help and that strength the again. of a

with from we'll Blair. Roberge William Jacob Next, hear

on Roberge. about I'm helpful. rates them sure that. on be just here you Jacob is we I customers, This Jake win Datadog's just that. But seen market the your for being you've little have would bit. wanted any know color you with on touch And they the Zerbib so on to heard competitive more? solution are a dynamics And for here

Jacob. view happening independent, observability monitoring for It's of we ticketing customers a signals what's Look, in their ingest market. question, it's the from can organization, our choose all a we're neutral early of an Thanks where we that and from who and And et Enterprise, game. provide the big providers, confident hyperscalers, independent it. appreciate that systems, not cloud they fact standpoint. in them a I value invest our in strength and to cetera, that with in Yes. regardless zero-sum we're and

platform a to that instant challenging space with to that the for be largest, things proven to working. are cross. scale, the a ability also be has And to resilient come others on you're world. management enterprises We've demonstrated difficult tried the counting And moat when who most in our matters into when even for have at not

field. lot benefit also machine time embedded We I'm from lot I'm not part stead. And XX also of the of we've long-term commitments data years with that that good AI. and do our building puts it. us in frankly, a hearing now is where I of of sort with customers around that customers done data the spending our foundational learning we've a multiyear in model, multiproduct and a relationship think work some about of

the mean to and who case. end price-sensitive. doesn't we're won't That's encouraged be the are a the by that see there. stabilizing, always customers competitive we win of But market, rates be from seems the that even perspective, lower Now there Commercial

the they the been by survive, live with really customers use is only So players automation have that coming resilient, and and proving this our I leverage cases us that high-fidelity by I for. the important multiple we secure into demonstrated think paranoid in at through scale, always also the saying, market. deliver but are we to And times I've

next Nick with Scotiabank. Turning to Altmann

still lot. kind in also what guys improved of how environment, obviously you macro your on of the margins guys focused Awesome. Great. the site. reacceleration kind is have Jen, control. you've are can on about The regardless talked a talked And about, ARR you have controlling past of you

you? go could versus think that my of a you so or when to guys of cause sort about margin question product signals the growth in see you what kind off make of would reacceleration? trade-off, would what potentially to are that the But Koji's. And of kind drive kind builds reinvest Or degree of maybe you sharper of market

Yes. but on, watching duration, keeping time. for we've an also improvement carefully. looking lot watching time of very which to capacity. cycle We're ramp I a our sales longer seen contract I'm I'm always mean, productivity sales eye on

are And have that all lot we've initial do more. be but the their with opportunity customer attaching products just monetize investments response to truck customers growth I significant for incident like us. to in made investment, opportunities think very terms AIOps, in a And new automation great still on a happy drivers reminder, represent to to service of very ops, and

been equally, who's generative great would historically, think And things a we're And or X a hunt like accustomed getting of the to getting just XX to. AI where, involving PagerDuty feedback I is chat a changed, or about simple many something a environment, treasure X impacted, are that that users like do ask sometimes ability in on call. have what lot more, people, live more

use indicators as sticky So product of different segments. productivity, And and cycles. the more we that, looking more sales it the more I'm behind shorter and the to all some I'd and for, love I'm across of and functions. ramp by different shorter makes improving I across think interesting but automate cases those across encouraged also sales are of leading stabilization that our invest

developer foundation the the upper forms continue we've that seen mid-market I a going very experience. strong that for we're to am enterprise. on reacceleration, particularly I focus in think to stabilization And -- and growth

growth, love well but I'd to capital that very in wisely. executing more to that sure investing want utilizing we're make I and be So

sort already some a those for know sort And transactions to ACV of or expansion how to sense relative deals, makes these close, you taking lot kind deals expansion kind couple pushing Awesome. as a of sense. that you of longer the mentioned of general? I of then that When the just Any rate large had large to within looks deals larger in of sort had think about closed. that of

about question, something Sorry, the heard I lost the you end of ask your I Nick. expansion rate.

bit got a shaky. have Connection seems little to

you that We lost... repeat want Sorry, to do just again? Nick,

Yes.

looks that right? It question can the deals NRR my in sense. talk kind deals you the and more around how large makes level metric just pushed, maybe getting just just deals, these kind When ACV you longer-duration there's of like of makeup in that contracts. of general? those was about are of that of high the or think Maybe So large to products even kind relative expansion

the then and first, jump crack like formula to what ACV Yes. There that at that where I Enterprise describes Management. population as can a mean, look Jen, like Management. free obviously one of and Incident those a We of into can the coming from those customers be started take often who products different. feel And spending the nature isn't sometimes on Incident of I'll customers they're in. they with because quite expand large automation, deals single value exceed our have in AIOps things us what into

we customers smaller adopt theme that value make on more they of is Management Cloud, in maybe with move AIOps. and being and then in what in initial customers who have And investment to that from the landed us Operations certainly we originally they ends the they PagerDuty. found the segment than other their that the overarching others. Then up far get have investment is in Incident Automation But case, as have that, automation the more

because and effectively And years, economic Enterprise months. payback investment a from an than period seeing for Those part over a at less and return one tends with Forrester, on make are them, total multiyear value. more far transformational who customers recent Getting this the impact adoption our value of the sales them It's we doing looked seeing multiproduct report multiproduct for is are that customers lot to us. is the customers the those which showed onto referenced often far they're retentive most of X and studies more motion. that XXX% XX important a more

Miller couple Mr. a at Truist Jump hands over next. still. have up coming raised more We

Filling in for tonight. Joel Fishbein

trying volume really more understand, And visibility? are composition to we deals? terms in deal like like year something just to these But ago that out have calling in pipeline commentary times of wanted is just the I'm just I click great really all to of guess, a ahead. I different volume hear on call. a then guess, double on this that attributed where It's the about there to the that large Or is I quarters around given you're the So couple versus as maybe of well? commentary the you all

Yes.

to these visibility, we those seeing again, we're now how our us for and a almost the that probably terms night of into deals, year And last so next now mature as visibility day building of part ago, is year manage that we're a a that, it's also deals have We're the do how we in if QX in in puts pipeline were what's we improvement QX where I year. like we look we in deals. of position and available and do next of We had terms cycle, to out getting QX, -- for visibility. time, compared through this whereas QX of that of those back So being their into position better us different managed life in year. pipeline visibility are a stretches QX

ones the that larger the covering particularly up $XXX,XXX more above we deals value. being are product mix our of deals, on $XX,XXX deals team the seeing a a deals their still of we're tends doing, where deals there's more a across to good of sales pipeline We're those and broader lot energy because demonstrating focus and because that the more But are end to volume good $XXX,XXX the of below still $XX,XXX.

it's significant also, move certainly, into of comes multi-threaded. selling a Along it more ends with. for far from up engagement some different have deal that enterprise the And been the us you of seasonality an customer, a of more with motion. level enterprise to being So shift that to

we lot showcasing to bring amazing more the opposed that our have be to focused product. as just on We a problems solutions customers' to

But that confidence. greater those manage our that things. with visibility us are So is pipeline of certainly certainly the and some giving pipeline improving, quality ability the is longer to

little monthly seeing I And revenue. than less growth a maybe terms significant if actually billings curious it, lower one almost any more, relates bit to given you Howard. contract I'm billings, inverse is have to changes time. just you're don't about as you but all was manage the expected And it the contingent for going I to could know talk you would come becoming Understood. given in over I'm back just to seeing -- actually I we're

Yes.

that we customers us, we -- have get we to bit So the doing our always practice with the of is arrangements renewal little expand are a sometimes multiyear co-term fact a typically date. they with also and the when both on tricky But billings terms us, where new. in customers of anniversary benefit

number quarter revenue. is end on So have where because a annual can co-terms, ARR recurring sometimes high in committing where with it's you rate of they're higher actually the a of growth up you terms

X-month align it X-month be to But renewal. might contract a or with their

So number why moved factors our because we can navigate that between triangulate that the folks. to is which to giving of having ARR creates our different the fluctuations kind in for complicate the billings was part billings, the to -- all of tricky is

one hand we more folks, have raised, Simran Okay, Biswal.

Can you me? hear

Yes, we you. can hear

Simran I is double-click quarter. for Congrats on This fourth the just Matt on little Hedberg. quarter. more wanted to a bit

then, that linearity gets into there next just a like? of been does risk some conversions? And year? is assumptions November? QX deals engagement with trends generally larger how into few weeks you've have so around built what speaking, pushed And look some into more at how far And pipeline within these First,

Yes, sure.

less-distinct moved linearity. we Simran, when previously that we relatively So over years have the from end-quarter the was high-velocity, in with high-volume transactions think company quarter, a linearity about

in Enterprise, your happening of certainly -- with a of you or in the business seen As the we've far shifted to we've the up end quarter. more end shift where of more linearity, that the

out. try to and of lot place and processes a now have We that systems in balance

the roughly to of half goal So and We're our QX, X it, quarters tend ensure that goal be regular to the equal, not place the holiday we're try a to ourselves expecting we move that Not call but have processes help months doing, quarter. in linearity but mess linearity. with all goal. find do we set will is first within towards that us put unusual a certain periods do in and

but a for it's being America example. of up challenging So the November in little Europe, ends period, for North for bit fine more terms holiday

normally, is the anything a not for is with But But bit this biggest respect an third expecting month quarter month we're us. to unusual. the unusual that. too of So

Okay.

long we journey about And customers? Great. like? more. one for And -- does engagement think that how is customer these When look just Okay. how generally typically the what large deals, the

it's varies happen, over has does customer. really time. basis through would it's then rare. land that generally It but the it we on we rare usually and happened, X-figure Yes, because It's smaller land a a expansion grow that case

things really through I solution One selling, think of has enterprise. the changed our on strategy focus in cloud the to that operations the

a services initiatives one already starting some customer all and as trying add that is products Again, I as go means that top of areas what our can CIOs customer conversation products they product how has about as that that of these, And support CTOs funded with opposed and have, of we to on go. then the that the starting call, to solution can and we're with and fast it. underway would

to the happens or hoops, industry, services federal, move like in They've a standard for they cases, fast. a environment, more an and longer. already cases, in integrated platform. in they're lot other tech and and want other have as financial it a that instance. some sometimes can In And lot cases, the highly regulated don't us take like really jump chosen In replatforming, will through CTO they of a

conversations effectively grow gives do to and that period more have we customer. period, visibility -- that with deals, within are gives But think through initiatives at, job say of what also the way and with to the the so it I growth better opportunity starting the I contract better over an transformation integrators in happens. there's customers like around our -- services the that us which a doing attaching support us there wouldn't large systems work multiyear having to creates co-term And engagement of So us period them looking one agreements helps. sort to

team. for the remarks. turn raised final you we any hands that it Okay, That have Jennifer, today. all we'll Thank you. is to

just us turns, for Well, as thank the today. hour everybody to I would like joining

of and America happy the foundation that a rest months. you with we're Thanksgiving, this holiday of period and hour Thanks. seeing builds that all We for foundation, stabilization and growth the you couple confident spend happy over are both North to wish next in strong grateful a optimistic the a reacceleration. a solid last I'm you