Why Pagerduty Inc (NYSE: PD) stock is going gangbusters

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Pagerduty Inc (NYSE: PD) stock surged over 23.5% on 19th March, 2020 (Source: Google finance) after the company reported better than expected results in the fourth quarter. The company reported a fiscal fourth-quarter loss of $10.4 million compared to $6.2 million, in the year-ago period. The company has ended the fourth quarter with $351 million in cash, cash equivalents and investments, which is up 224 million from the end of fiscal year 2019.

The company has recently achieved a major milestone, after it surpassed 500,000 users on the platform. In Q4, the company had continued to make progress in enterprise. The company has landed or expanded business with Anheuser-Busch, Booking.com, American Express, Netflix, Vanguard, CrowdStrike, ADP, Snowflake, Peleton, BioDesk, Shopify and TripActions etc. In enterprise, the company had signed an expansion deal with a top 20 Internet retailer and Fortune 500 company who was already using Modern Incident Response.

The company posted the non-GAAP gross margins, which are industry leading, of 87%. The company saw a 14% rise in total net customer additions on a year-over-year basis to 12,774 customers.  the company had 20 more customers with ARR above $100,000 in Q4, taking the company to 323 customers, which is a growth rate of 42% year over year. Customers with more than $1 million in ARR increased by 50% year-over-year to 18 in the quarter.

PD in the fourth quarter of FY 20 has reported the adjusted loss per share of 3 cents, beating the analysts’ estimates for the adjusted loss per share of 6 cents, according to analysts polled by FactSet. The company had reported the adjusted revenue growth of 36 percent to $45.9 million in the fourth quarter of FY 20, beating the analysts’ estimates for revenue of $45.1 million. The revenue growth was driven by new customers, new users and new product adoptions.

PagerDuty expects an adjusted loss to be in the range of 9 cents to 8 cents a share on revenue expected to be in the range of $48 million to $49 million in the first quarter, and an adjusted loss to be in the range of 31 cents to 25 cents a share on revenue expected to be in the range of $208 million to $213 million for the year. Analysts had projected a loss of 8 cents a share on revenue of $47.8 million for the first quarter, and 23 cents a share on revenue of $210.3 million for the year.

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