PagerDuty’s Dollar-Based Retention Rate (2018-2022)

This statistic highlights PagerDuty’s Dollar-Based Retention Rate, reported annually from 2018 onwards.

PagerDuty’s Dollar-Based Retention Rate 

Dollar-based Net Retention Rate

PagerDuty evaluates the long-term value of customer relationships using a dollar-based net retention rate since this statistic shows the company’s ability to maintain and grow annual recurring revenue (ARR) from current customers. The dollar-based net retention rate analyzes the ARR of the same group of consumers over time.

• It is computed as a dollar-based net retention rate as of a period end by first calculating the ARR from a cohort of all customers 12 months before to the period end, or Prior Period ARR,
• And then calculating the ARR from the same cohort as of the current period end, or Current Period ARR. ARR for the current period includes any expansion and is net of downgrades or churn during the previous 12 months, but it excludes ARR from new customers.
• To calculate the net retention rate in dollars, divide the total ARR for the current period by the total ARR for the preceding period.

The Current Period ARR of Rundeck customers who were PagerDuty customers as of 12 months before the period end is included in the computation of the dollar-based net retention rate for the year ending January 31, 2021.

Observations:

There were over 13,500 clients worldwide as of January 31, 2021, spanning from innovative startups to established Fortune 100 organizations across every area, including software and technology, telecommunications, retail, travel and hospitality, media and entertainment, and financial services. Engineering, IT Operations, Security, and Customer Service are just a few of the use cases where goods are used. 426 clients have an annual recurring revenue (“ARR”) of more than $100,000, while 26 customers have an ARR of more than $1,000,000.

The annualized recurring value of all active contracts at the conclusion of a reporting period is defined as ARR. A customer is a separate legal entity with an active subscription to the platform from the firm or one of its partners. We regard the parent corporation as the client rather than each subsidiary or division as a separate customer when an organization has several subsidiaries or divisions. For the fiscal year ended January 31, 2021, our ten largest customers accounted for roughly 12% of our sales, while no one client accounted for more than 10% of our revenue during the same time, demonstrating the diversity of our customer base.

The firm has built a loyal client base by playing an important part in customers’ digital operations and expanding with them as their demands increase, with total ARR churn being less than 5% of the initial ARR for the fiscal year ending January 31, 2021. The ARR churn rate indicates revenue lost from customers who were not contributing revenue at the end of the current quarter but were providing revenue in the previous year’s corresponding period. Monthly subscriptions are typically invoiced monthly, whereas subscriptions with periods of more than one year are often billed yearly.

The firm grew its current client base by adding more users (e.g., more developers), developing new use cases (e.g., developer to IT), and upselling more expensive packages and items. Following the deployment of the platform, the client base often expands significantly. For the fiscal year ending January 31, 2021, the dollar-based net retention rate was 121%.

About the company:

PagerDuty is a cloud computing company based in the United States that specializes in a SaaS incident response platform for IT organizations. When seconds count, its digital operations management platform enables the proper action. The platform, which incorporates auto-remediation software, is the most effective approach to manage urgent, mission-critical tasks while ensuring that digital services remain operational at all times. It stands at the heart of a company’s digital ecosystem, collecting data and employing machine learning and automation to prevent and automate real-time tasks, as well as forecast and eliminate downtime. The firm assists teams in reducing downtime, increasing productivity, and speeding up digital transitions.

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