Pagerduty Inc (NYSE:PD) stock fell 1.64% (As on September 4, 11:29:50 AM UTC-4, Source: Google Finance) after the company reported second quarter earnings that beat estimates, but revenue fell short of expectations and the company provided weaker-than-anticipated guidance. Customers with annual recurring revenue over $100 thousand grew 6% to 820 as of July 31, 2024, compared to 773 a year ago. Dollar-based net retention rate was 106% as of July 31, 2024, compared to 114% a year ago. Free and paid customers totaled more than 29,000 as of July 31, 2024, representing approximately 12% growth year over year. Total paid customers were 15,044 as of July 31, 2024, compared to 15,146 a year ago. Remaining performance obligations were $403 million as of July 31, 2024. Of this amount, the Company expects to recognize revenue of approximately $280 million, or 70%, over the next 12 months with the balance to be recognized as revenue thereafter. The number of customers with ARR greater than $500 thousand grew over 20%. The company has expanded generative AI solutions with PagerDuty Advance to mitigate risk of operational outages including AI-powered capabilities for enterprises to accelerate strategic roadmap initiatives, build more resilient operations and drive digital transformation initiatives.

PD in the second quarter of FY 25 has reported the adjusted earnings per share of 21 cents, beating the analysts’ estimates for the adjusted earnings per share of 17 cents. The company had reported the adjusted revenue growth of 7.7 percent to $115.9 million in the second quarter of FY 25, missing the analysts’ estimates for revenue of $116.51 million.

Additionally, in the second quarter, Loss from operations was $16.0 million; operating margin was negative 13.8% and Non-GAAP operating income was $20.1 million; non-GAAP operating margin was 17.3%. Net cash provided by operating activities was $35.8 million, with free cash flow of $33.3 million. Cash, cash equivalents, and investments were $599.3 million as of July 31, 2024.

For the third quarter, the company forecasts revenue of $115.5-$117.5 million, well below the $120.3 million consensus. Full-year revenue guidance was also cut to $463-$467 million from the previous $471-$477 million range, falling short of the $473.7 million analysts anticipated.

For the third quarter of fiscal 2025, PagerDuty currently expects Non-GAAP net income per diluted share attributable to PagerDuty, Inc. common stockholders of $0.16 – $0.17 assuming approximately 96 million diluted shares and a non-GAAP tax rate of 23%. For the full fiscal year 2025, PagerDuty currently expects Non-GAAP net income per diluted share attributable to PagerDuty, Inc. common stockholders of $0.67 – $0.72 (up from $0.66 – $0.71)