According to the news report by MarketWatch, PagerDuty Inc.’s stocks shot up by almost 60% on the first day of trading on Thursday, April 11.
The digital management cloud-based platform had already priced its IPO (initial public offering) above the highest range, however, the Chief Executive Officer of the company stated that there was still room for PagerDuty’s share price to grow.
According to data from FactSet, the company’s market valuation reached $2.82 billion after its share price skyrocketed by more than 59% to close trading at $38.25 per share. The company’s shares reached an intra-day trading high of $39.61 per share.
The company had launched its IPO on late Tuesday at $24 per share, and raised more than $200 million at the time. Prior to the IPO, the company had been expected to price its shares between $21 and $23 as late as last week. Initially, the company had targeted an IPO price of between $19 and $21.
PageDuty has a cloud-based subscription service that lets businesses improve the constant interaction between software operators and developers – a segment of business called DevOps – in their organizations. The service also allows users to utilize real-time data to handle incidents that could take place.
PagerDuty’s competitors include OpsGenie, a division of Atlassian Corp., and VictorOps, a division of Splunk Inc.
The CEO and Chairperson of PagerDuty, Jennifer Tejada, stated that the company was looking at a $25 billion market that consisted of over 22 million software developers who were focused on ensuring that all the apps on smartphones across the world or any program on computers were working the way they were supposed to, and to cut down on downtime.
Tejada, after the IPO, owns a 5.7% stake of the company. During a telephonic interview, the CEO stated that at this time, about 300,000 software developers were using their platform.
In terms of PagerDuty’s role in the digital management chain, Tejada said that their company would signal the right person on the correct team to fix a problem that was identified. The platform would also be able to rope in other SMEs (subject matter experts) when required. Tejada said that their company had been providing this service reliably for the last one decade.
According to one of PagerDuty’s main investors who have a 10.8% stake in the company, Bessemer Venture Partners’ Ethan Kurzweil, investors were beginning to be more interested in startups that were focused on serving the IT needs of businesses across the world.
Kuzweil stated that this new segment of the industry was gaining a lot of attention from Wall Street. He also stated in relation to the services being offered by PagerDuty, that it was a very sticky product with very little churn. He said that the company’s service was very easy to adopt and that it was adopted very quickly within an organization.
Bessemer stated that PagerDuty was the investment firm’s 5th develop-focused business in the last 5 years. The company had also invested in Shopify Inc., Twilio Inc. as well as SendGrid (which was later acquired by Twilio).
For its IPO, PagerDuty has planned to sell 8.5 million shares. Stockholders of the company had also offered up 570,000 shares for the IPO. Underwriters had been given an option for another 1.36 million shares.
For the fiscal year that closed on January 31, 2019, PagerDuty had recorded a loss of $40.7 million on revenues of $117.8 million. For the same time period a year ago, the company had reported a loss of $38.1 million on revenues of $79.6 million. The number of customers paying over $100,000 a year for the company’s services went up from 144 in 2018 to 228 in 2019.