- On Thursday, PagerDuty went public, and the stock soared some 56% percent in the first day of trading.
- PagerDuty CEO Jennifer Tejada says the company decided to IPO now as a way to increase brand awareness.
- Tejada and PagerDuty CFO Howard Wilson share their vision for the company to grow in other markets besides IT, expand globally, and generally push towards profitability.
PagerDuty hit the public markets on Thursday with a $1.76 billion valuation, and soared some 56% in its first day of trading.
CEO Jennifer Tejada tells us that PagerDuty chose to go public now not for any immediate financial reason, but rather, as a way to generate buzz and signal to enterprises that the company was here and ready to serve larger customers.
“For us, going public was an opportunity to increase brand awareness,” Tejada told Business Insider. “We were well-capitalized. The way customers find us tends to be through search and online. Going public was a way to signal to enterprise customers that we are a credible healthy company that they can partner with and leveraging over time.”
PagerDuty, which helps alert developer teams when something goes wrong with their software, first filed to go public in mid-March. It saw 48% revenue growth over the last twelve months and now has over 10,000 customers, too, according to its filing. The company attributes that momentum to the rising importance of the programmer in the modern workforce.
“When we think about growth, it’s largely driven by the fact that every company is becoming a software company,” PagerDuty CFO Howard Wilson told Business Insider. “We see our growth opportunity associated with helping the company deliver services.”
PagerDuty has a strong existing base with developers and information technology — it’s a major player in DevOps, a philosophy that’s helping programmers deliver more code, faster, by helping fix problems as they arrive and not later.
“It’s a very early category as every company becomes a software company to live up to the demand requirements,” Tejada says. “We’re seeing DevOps become mainstream and strategic. As far as we’re concerned, PagerDuty still has a lot of growing to do. Taking the company public brings the power of our platform to other companies.”
In general, Wilson and Tejada say that the company sees opportunities to expand into other aspects of the business as well. Already, PagerDuty is being used in customer support, security, marketing, and finance, the company says.
When PagerDuty first began, many investors didn’t understand why they should throw their money at a tool for developers. But things have changed, and now businesses have no problem seeing why PagerDuty’s platform can be valuable, Wilson says.
And most customers come to PagerDuty, rather than the other way around, Wilson says. Many of them find out about it online or through word-of-mouth.
“The value is very obvious to people. We’ve made it really easy for the product to use,” Wilson said. “You can actually go there and be up and running and get immediate benefits. We think of it as being a consumer-grade application on top of an enterprise grade platform. That’s how developers have come to know us. There’s been a viral adoption within companies.”
Many international customers have found PagerDuty online, even if the company itself hasn’t established a formal presence in those countries, Wilson says. But this prompted PagerDuty to spend the last year and a half building up teams in Europe and the Asia Pacific regions. It plans to continue growing internationally post-IPO.
“We see our growth coming from existing customers who use us today,” Wilson said. “We see it as coming from the new acquisition of customers. We’re looking to expand our teams in Europe and Africa and Asia Pacific and Japan. Part of it is we’ve already seen a positive signal in our growth rates in those regions.”
PagerDuty isn’t yet profitable, but Wilson says PagerDuty are on the path to profitability, and were cash flow positive in two quarters in the past year.
“We see a clear path to continue to drive down that path,” Wilson said. “We see the path to profitability relative to the opportunity to grow.”
With this IPO, Wilson hopes to build up PagerDuty’s profile as a global company.
“We believe every company is a software company,” Wilson said. “We felt the IPO would be a really important milestone for us to raise the visibility of PagerDuty and what PagerDuty does. We’ve been very carefully efficient. This was not a fundraiser for us to run and sustain the business, but to ensure that people understand the value PagerDuty can bring.”
Its IPO follows Lyft’s, which went public in late March.
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