Jacob Zerbib

Jacob Zerbib requested more color on new logo acquisition, specifically landing size relative to prior years, given the prioritization of larger deals and multi-year commitments, and the expectation for stock-based compensation levels on a forward basis.

Answer

Jennifer Tejada (Chairperson and CEO, PagerDuty) noted good new logo acquisition across all segments, including a balanced mix of new AI natives and traditional companies. Howard Wilson (CFO, PagerDuty) added that land sizes vary, from small to over $100,000, particularly in the enterprise segment. Howard Wilson also stated that stock-based compensation is expected to decline, with Jennifer Tejada emphasizing it's a lagging indicator of past efforts and the company's commitment to managing it for profitable growth.

Jacob Zerbib asked for more details on new logo acquisition, specifically how these logos are landing in terms of size relative to prior years, given PagerDuty's prioritization of larger deals and multi-year commitments. He also inquired about the meaningful decline in stock-based compensation this quarter and whether this level should be expected on a forward basis, given the company's positioning for GAAP profitability.

Answer

Jennifer Tejada, Chairperson and CEO of PagerDuty, noted good new logo acquisition across all segments, including digital-first/self-service and go-to-market-supported growth. She observed a balanced mix of new AI-native companies (e.g., Anyscale, Perplexity) and traditional companies undergoing transformation, as well as competitive replacements. Howard Wilson, Chief Financial Officer of PagerDuty, added that land sizes vary, from small to over $100,000, with larger lands typically in enterprise, software/tech, and AI leaders. Regarding stock-based compensation, Wilson stated it is expected to decline, though the rate will vary. Tejada added that it is a lagging indicator of past efforts, and PagerDuty remains committed to managing it for profitable growth.

Jacob Zerbib from William Blair asked about pipeline visibility from large customers, questioning if the trend of multi-product deals providing more visibility had changed due to sales team shifts and the macro environment.

Answer

CEO Jennifer Tejada affirmed that enterprise demand for the multi-product platform remains strong and that recent challenges are related to internal execution, not a change in market demand or visibility. She expressed confidence in the company's ability to replicate large, transformative deals and accelerate growth in the second half of the year.

Jacob Zerbib, on behalf of Jake Roberge, asked about competitive dynamics, specifically regarding Datadog's incident management solution, and inquired about win rates.

Answer

CEO Jennifer Tejada emphasized that it's a large, early market and not a zero-sum game. She highlighted PagerDuty's competitive strengths as its neutrality, independence from any single observability provider, proven resilience at scale, and a 15-year proprietary data model. She stated she is not hearing much about this competitor from customers in the field and that PagerDuty's competitive win rates remain strong.