PagerDuty: Exert from TEAM CC

Over the past month or so I’ve monitored MDB and PD to see them lagging well off previous ATH and not following the ebbs and flows of the cohort as a whole. So I asked myself…what gives.

I kept reading about TEAM and OpsGenie, so I went into the latest TEAM ER and found this:

Heather, I can’t get into specifics. But as you mentioned, we mentioned in our shareholder letter that we’ve doubled the pace of customer acquisition and we feel really good about that that acquisition. If you look through our internal charts, there is a distinct change when OpsGenie, we came at last June and we feel great about that.

If you - in trading with customers, it is a great product. Sometimes I mentioned at the acquisition, sometimes you require something and you have to add features to it or make it enterprise-ready. And OpsGenie actually scales better than any of the other products out there in the market. And so for us, it was just a matter of getting in front of our customers.

I know it’s still very early in the journey of putting it on the Atlassian platform. Now we are really happy with the pace that we’ve only it’s required less than a year ago. We’ve already done identity and user interface and stuff like that. So, we’re sort of at the - still at the start of what I think of in terms of cross-selling into our existing base.

And then Heather, I would just add that when we announced the acquisition of OpsGenie, we noted that it would drive a point of revenue growth on these then revenue guidance for fiscal 2019 and I am pleased to say that we achieved that. So strong momentum.

We are a collaboration company around teams of people. Something like OpsGenie where you are coordinating people is much more in our wheelhouse of strength in our DNA as a business around solving people and collaborative problems around technology rather than actually solving a technology problem per se.

My guess is this is the driver. And the question burns, is there room for two or is this an emerging winner take all market.

PD has a very strong Net Revenue Retention of 137%, Rev growth in upper 40%, and mid 80s margins, even showing recent acceleration in revenue growth from 47% to 49%.

Will continue to watch and monitor and manage risk. I continue to be interested in PDs ability to expand beyond alerting and use the DevOps model to sell customer innovation use cases into new enterprise and expand in existing.

Just a Fool

Long PD ~5%