PagerDuty Inc at Robert W Baird Global Consumer, Technology & Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : Lots to talk about. So it's a big room, so that's exciting to see. So maybe we should just level set. Jen, you can maybe share what exactly PagerDuty does?

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : So PagerDuty really burst onto the scene around the growth of public cloud, and really, the recognition that the signal-to-noise ratio was going to get a lot more complicated around these digital things. In the old days you bought some software, it was on a server, it had native alerting, you used it, it was just fine. Suddenly, the world's a lot more complicated. In incident response, you guys really have become the de facto standard, at least from what we can tell, in the marketplace. But you're doing a lot more than that right now. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 07, 2023 / 2:15PM, PD.N - PagerDuty Inc at Robert W Baird Global Consumer, Technology & Services Conference So maybe, Jen, if you can talk a little bit about like, say, when you look at your top customers, maybe those paints -- seven figures of those were on that path to get there. What are they using PagerDuty for beyond, just say, instant response or help us understand the full platform?

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : Got it. That's great. Thanks, Jen. Please keep the questions coming on. Howard, I'll bring you in here. And let's talk just a little bit about the background and last quarter. There were some macro changes that you guys called out, which clearly came on quite suddenly. So maybe talk a little bit about those changes, what you saw, and how that caused your revised full-year guidance to differ from your initial thought coming into the year?

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : Got it. And on the create and close side that you mentioned, those have been very consistent in as long as you've been in the company. Do those tend to be in -- what's the sweet spot there? Is that commercial, or are there enterprise in there as well?

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : I think, if I have the number right, like isn't 70% of your revenue now high into commercial enterprise, is that --?

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : 80% --

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : Got it.

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : Well, one of the changes you guys made some years ago now, which I really liked was -- you've removed a lot of noise in the model, is to make a free tier down there. And really build that next gen of PagerDuty users. And so that SMB weakness is not uncommon among a lot of our product-led REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 07, 2023 / 2:15PM, PD.N - PagerDuty Inc at Robert W Baird Global Consumer, Technology & Services Conference growth companies. We have Atlassian later today, they've experienced that as well. But is there a way for us to know how much of that churn is churn to you?

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : Got it. There's a few questions in here on competition. And a few more are asking the same question. And I'm going to take it and I'm going to repackage it a little bit, if I can. Because one of the --

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : Well, yeah. Exactly, you can't see this. I know you guys have done a great job of managing that -- from the time of your IPO that competition concern was just all over you. And I think for the most part, you guys have done a good job of managing that relative to say, point competitors. But I guess now, right? Like, what is the proper home for this, right? Should we think of ServiceNow as a competitor now? Is this part of ITSM and part of ITOM? It's a blessing and a curse. So as you guys become more of a platform, your competitive set is going to change necessarily. So how should we think about that?

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : And when you're in that customer meeting, like tomorrow when you're at [Q]. What about the ROI case studies which I think is after they're really compelling, right?

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : Right REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 07, 2023 / 2:15PM, PD.N - PagerDuty Inc at Robert W Baird Global Consumer, Technology & Services Conference

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : Okay. And in the interest of time, I'm going to consolidate a bunch of questions as well. So apologies to those that asked them. But I guess one way to say would be, how do you think about yourselves relative to the observability vendors? Because they are also in vendor-consolidation Mode. They're also bringing single point of presence visibility to an organization. And maybe a AIOps might be ground zero where you guys meet them. But how should we think about that?

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : Got it. Okay, great. And last one was on security vendors who also works out of moving into both observability and incident response. And if there's any crossover there with you guys?

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : Got it. That's great. We have a minute left. Howard, I'll just hit on this. A lot of cost controls on the positive side, we've seen the impact on the margins as well as growing free cash flow. So maybe what levers do you have still that remain to be pulled? And then also, what are your thoughts relative to top priorities with the cash flow? And is it -- are you thinking about M&A? How should we think about that?

Question: Rob Oliver - Robert W. Baird & Co. - Analyst : Great. Well, with that we're out of time. Jen Tejada, Howard Wilson, thank you guys very much. Please join me for thanking PagerDuty for joining us. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 07, 2023 / 2:15PM, PD.N - PagerDuty Inc at Robert W Baird Global Consumer, Technology & Services Conference