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PagerDuty Keeps Building on its API Strategy

Posted on Tuesday, Oct 20th 2020

A Fortune Business Insight report released earlier this year estimates the global DevOps tool market to grow at 19% CAGR to $15 billion by 2026. Last month, San Francisco-based PagerDuty (NYSE: PD) announced its second quarter results that impressed the market.

PagerDuty’s Financials

Revenues for the second quarter grew 25.7% to $50.7 million, ahead of the market’s forecast of $50.65 million. GAAP net loss was $14.7 million or $0.19 per share, compared with a loss of $12.6 million or $0.17 per share a year ago. On an adjusted basis, loss was $0.04 per share compared with the market’s forecast of a loss of $0.07 per share.

Among key metrics, it reported over 13,300 customers at the end of July 2020 with new names like The Atlantic, Dignity Health, Genentech, Lowes, Richemont, and Telenet joining its customer portfolio.

PagerDuty forecast revenues of $52-$53 million for the third quarter with an adjusted loss of $0.11-$0.10 a share and revenues of $206-$211 million for the year with an adjusted loss of $0.30-$0.27 a share. Analysts had forecast revenues of $52.6 million for the quarter with a loss of $0.09 a share and revenues of $208.3 million for the year with a loss of $0.27 per share.

PagerDuty’s API Strategy

PagerDuty continued to add more integrations to its platform as part of its API strategy. During the quarter, it expanded its integration with Zoom, Mircosoft Teams, and Slack. The new integration with Zoom Video Communications enables DigitalOps teams to start Zoom meetings directly from the PagerDuty platform. Anyone in the incident response team can now assemble a meeting instantly or through a prescheduled runbook response, eliminating the need to set up meetings and send invitations.

As more security teams adopt PagerDuty to reduce cyber risk, security partners such as StackBox and HackerOne published new integrations for cloud security and Dev SecOps. It released an expanded analytics API to provide more granular access to incident data. When integrated into business intelligence systems, customers will be able to manage and learn from incident history and trends.  

PagerDuty has more than 350 technology partners that provide integrations across a variety of cloud services, monitoring, deployment, and ticketing systems for incident resolution and operations management.

PagerDuty’s Product Expansion

Besides integrations, it also introduced new products. Earlier last month, it announced its new customer service solution that has been built specifically for teams responsible for ensuring smooth customer experiences. The solution collaborates directly with Dev and IT Ops teams, while keeping its customers informed. It thus increases the productivity of the service teams while protecting the company’s reputation and revenue. The platform also automates the transition of agents from on-duty to on-call, reducing the need for staffing on off-hour shifts, delivering cost savings and productivity improvements.

This new solution comes with integration with Salesforce Service Cloud and an updated integration with Zendesk, thus providing agents with automated workflows and the latest information on incident priority and status. Additionally, for Zendesk, it allows agents to see a stats dashboard in the sidebar of the Zendesk interface, reducing the need to switch between tools.

PagerDuty’s Acquisitions

Earlier this month, PagerDuty also announced the acquisition of San Francisco based DevOps automation leader Rundeck for an estimated $100 million. Rundeck’s intelligent machine automation gives engineering, IT, customer service, and security teams a self-service way to run automated machine-centric workflows to prevent, diagnose, and resolve incidents without escalating them to an expert. It has over 150 enterprise and mid-market customers worldwide and an active, open source community of more than 60,000 users. Like PagerDuty, Rundeck is used primarily by frontline incident response teams, including engineering, IT, customer service, and security. Prior to the acquisition, Rundeck had raised $3 million in funding from TDF Ventures.

PagerDuty’s stock is currently trading at $30.38 with a market capitalization of $2.4 billion. It touched a 52-week high of $37.24 in August. The market turbulence in March sent the stock to a 52-week low of $12.33.

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