#1PagerDuty Investor presentation Q2 FY 2023 Period ended July 31, 2022#2Safe harbor This presentation contains forward-looking statements. All statements other than statements of historical fact contained in this presentation, including statements as to future results of operations and financial position such as the financial guidance for the third quarter of fiscal 2023 and full year 2023, growth prospects and future revenue, planned products and services, business strategy and plans, objectives of management for future operations of PagerDuty, Inc. ("PagerDuty" or the "Company"), market size and growth opportunities, total addressable market (TAM), competitive position and technological and market trends, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "can," "desire," "able," "guidance," "expect," "extend," "anticipate," "should," "believe," "hope," "target," "project," "accelerate," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," "shall" or the negative of these terms or other similar words or expressions. You should not rely upon-forward looking statements as predictions of future events. The outcome of events described in these forward-looking statements contained in this presentation is subject to known and unknown risks, uncertainties, assumptions and other factors that may cause PagerDuty's actual results, performance or outcomes to differ materially from those expressed or implied by such forward-looking statements, including: the effect of uncertainties related to the COVID-19 pandemic on U.S. and global markets, our business, operations, revenue results, cash flow, operating expenses, demand for our solutions, sales cycles, customer retention and our customers' businesses; our ability to achieve and maintain future profitability; our ability to attract new customers and retain and sell additional functionality and services to our existing customers; our ability to sustain and manage our growth; our dependence on revenue from a single platform; our ability to compete effectively in an increasingly competitive market; and general market, political, economic, and business conditions, including those related to COVID-19 and geopolitical uncertainty. The forward-looking statements contained in this presentation are also subject to additional risks, uncertainties, and factors, including those more fully described in PagerDuty's filings with the Securities and Exchange Commission, including its most recently filed Form 10-K and 10-Q. Forward-looking statements represent PagerDuty's management's beliefs and assumptions only as of the date such statements are made. PagerDuty does not undertake, and expressly disclaims any duty, to update any statements made in this presentation to reflect events or circumstances after the date of this presentation or to reflect new information or the occurrence of unanticipated events, except as required by law. This presentation also contains estimates and other statistical data made by independent parties and by the Company relating to market size and growth and other industry data. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. The Company has not independently verified the statistical and other industry data generated by independent parties and contained in this presentation and, accordingly, it cannot guarantee their accuracy or completeness. In addition, projections, assumptions and estimates of its future performance and the future performance of the markets in which the Company competes are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. These and other factors could cause results or outcomes to differ materially from those expressed in the estimates made by the independent parties and by PagerDuty. This presentation also includes certain non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of the Company's non-GAAP financial measures as tools for comparison. The Company has provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in the appendix. For further information with respect to PagerDuty, we refer you to our most recent Form 10-K and 10-Q filed with the SEC. In addition, we are subject to the information and reporting requirements of the Securities Exchange Act of 1934 and, accordingly, file periodic reports, current reports, proxy statements and other information with the SEC. These periodic reports, current reports, proxy statements and other information are available for review at the SEC's website at http://www.sec.gov. © PagerDuty Inc. PagerDuty and the PagerDuty logo are trademarks of PagerDuty, Inc. Other names and brands may be claimed as the property of others.#3Purpose We empower teams with the time and efficiency to build the future. Vision An equitable world where we transform critical work so all teams can delight their customers and build trust. Mission To revolutionize operations and build customer trust by anticipating the unexpected in an unpredictable world. PagerDuty#4Our core Promise For Developers, IT Operations, Customer Service, Security, and more teams, we are the best way to manage urgent, mission-critical work and keep digital services always on. Our core Value We help those teams spend less time on interrupt work and more time focused on creating new and better digital experiences. 888 Our core users PagerDuty is essential infrastructure for digital operations: integrates with the entire tech stack, uses machine learning to pinpoint issues, and automates action to resolve issues when seconds matter. It delivers immediate value, improves team productivity, and ensures a great digital experiences for end users. PagerDuty#5Digital drives sustained demand Digital first: Characteristics Digital acceleration Cloud adoption DevOps transformation Real time work Service ownership Broad ecosystem Event Intelligence, Automation, and Analytics Orchestration PagerDuty#666% have more than 10 observability tools Total observability tools used to collect data from application environment Source: ESG Research Report, Observability from Code to Cloud, May 2022. 11-15 46% PagerDuty 1-5 10% 6-10 22% 16-20 17% 20+ Don't know 3% 2%#7Digital Operations Lifecycle Accelerated Root Cause Identification Work, Data, Customer Signals and Events Event Management Event Driven Automation PagerDuty D. On-Call Management Automated Diagnostics Automated Resolution Process Automation IT Ops Human Mobilization Automated Incident Response < / > DevOps Customer Service Ops SecOps Business Ops Executives & Stakeholders#8PagerDuty Operations Cloud™ Integrations 700+ aws DATADOG GitLab HashiCorp Digital Operations Platform Incident Response AlOps Process Automation Customer Service Operations المالي B Fully managed Global scale Machine learning Deep data set Service directory APIs PagerDuty PD apps ☑ salesforce zendesk CollabOps slack zoom Microsoft Teams#9PagerDuty® for Process Automation PagerDuty Runbook Automation Automate and delegate runbook tasks from a SaaS environment Fully Managed SaaS PagerDuty Process Automation Self-managed process automation platform for more flexibility Customer Managed Cluster ☑ PagerDuty Automation Actions Connect any automation for diagnosis and remediation of incidents into PagerDuty Add-On Directly Inside PD PagerDuty Automates Diagnostics and Remediation Of Incidents and Repeat Work Event Driven/Real Time + For Responders + For Customer Service + For Business#10Plans for the Digital Operations Journey Incident Response AlOps Process Automation Customer Service Operations Land: PagerDuty Incident Response - Free - Professional $252 per user/year Business $492 per user/year Digital Operations (contact for pricing) Add on: PagerDuty Event Intelligence, $288 per user/year Add on: PagerDuty Automation Actions, $240 per user/year Land: PagerDuty Process Automation Self-managed (contact for pricing) Land: Pagerduty Runbook Automation SaaS, $1,500 per user/year Land: PagerDuty for Customer Service - Professional $252 per user/year Business $492 per user/year Digital Operations (contact for pricing) Deliver always on digital services by mobilizing the right response when seconds matter. Reduce noise, identify root causes, and automate incident resolution in real time. Operate faster by automating and delegating business and IT processes Empower Customer Service teams to proactively solve customer issues, faster.#11Why PagerDuty wins - fast time to value Technology * Customer focus Integrations Al / Machine Learning Automation 24/7 availability Enterprise Scale Easy setup Driving value for customers 795% 77% 3-year ROI Reduced time to troubleshoot issues 2 months To payback 74% Reduction in unplanned downtime 85% Reduced time to identify troubleshooting issues Source: IDC Business Value Research, sponsored by PagerDuty, "PagerDuty Helps Organizations Optimize Their Digital Operations Management to Create Better Value," January 2021 PagerDuty#12Innovation driven land-and-expand model Expansion Motion at a Major Financial Institution A leading financial services organization relies on PagerDuty to increase workforce efficiency, critical application uptime, and operating leverage. Value captured includes, reduced toil and improved customer experience through greater app reliability. Т 2019: Initial purchase for a group delivering applications for high value clients 2020: Additional purchases => $1M in ARR 2021: Added gold services 2022: Additional 7-figure deal Thousands Users PagerDuty Initial purchase Expanded into Gold Services other technology attached teams 7-figure pansion Hundreds + 2019 2020 2021 2022#13Underpenetrated, fragmented market opportunity 75 million users by persona (estimated) in 2022 Developers: driven by digital services and software-driven innovation → 25m users Infrastructure and Operations: undergoing modernization with Digital, Cloud adoption, and DevOps → 21m users Customer Service: push for improving cost-efficiency and productivity through self-service and automation → 27m users SecOps: a relatively small, but influential population (i.e. protect all technology / data, employees, customers and stakeholders for a business) → 2m users Sources: IDC Worldwide Developer Forecast: 2022 to 2027; WW Info / Comm. Technology Employment Forecast, 2020-2023: Covid-19 Impact on Demand for Skills, Bureau of Labor Statistics (2) Source: CaplQ PagerDuty#14Enterprises are early in Digital Operations Maturity Manual Issues are identified by customers not by internal teams. Little to no mechanisms to reach experts in an urgent and timely manner. Reactive Always in firefighting mode. No defined process for managing issues. Operational Maturity Responsive Resolving issues as they occur. Distributed teams begin to take full ownership of microservices. Preventative Proactive Seamless, coordinated issue management. Ahead of issues before they start. Issues are detected and fixed by technical teams before customers are aware. Predictive issue remediation occurs based on machine learning insights. PagerDuty#15PagerDuty Financials#16Select operating metrics PagerDuty Revenue FY22 Q2 FY22 Q3 FY22 Q4 FY23 Q1 FY23 Q2 $68 $72 $79 $85 $90 Revenue Growth 33% 34% 32% 34% 34% Operating Margin (14.7%) (7.0%) (3.2%) (2.7%) (3.7%) DBNR Paid Customers 126% 124% 124% 126% 124% 14,169 14,486 14,865 15,040 15,174 Customers >$100K 501 543 594 655 689#17Non-GAAP target operating model PagerDuty % of Revenue FY20 FY21 FY22 FY23Q2 ~$1B Target Gross Margin 86% 87% 85% 84% 85% 85% Sales & Marketing 53% 50% 50% 46% 37% 35% Research & 26% 25% 25% 25% 26% 20% Development General & 24% 21% 19% 17% Administrative 12% 10% Operating Margin (17%) (8%) (8%) (4%) 10% 20%#18Focus on environmental, social and governance 2nd Annual Diversity Report Published December 2021 PagerDuty Awarded Silver Medal EcoVadis Sustainability Rating September 2021 Pledge 1% To accelerate change in local and global communities 2nd Annual Social Impact Report Published April 2022 PagerDuty.org Supports organizations taking real-time action for good#19PagerDuty Our mission at PagerDuty is to revolutionize operations and build customer trust by anticipating the unexpected in an unpredictable world.#20PagerDuty Appendix#21Definitions Annual recurring revenue (ARR) - Annualized recurring value of all active contracts at the end of a reporting period. Customer A separate legal entity, such as a company or an educational or government institution, that has an active subscription with us or one of our partners to access our platform. In situations where an organization has multiple subsidiaries or divisions, we treat the parent entity as the customer instead of treating each subsidiary or division as a separate customer. Dollar-Based Net Retention (DBNR) - Calculated as of a period end starting with the ARR from the cohort of all customers as of 12 months prior to such period end. Next, we calculate the ARR from these same customers as of the current period end. Period ARR includes any expansion and is net of downgrades or churn over the last 12 months but excludes ARR from new customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the dollar-based net retention rate.#22Reconciliation PagerDuty, Inc. Reconciliation of GAAP to Non-GAAP Data (in thousands, except percentages and per share data) (unaudited) Year Ended January 31 Three Months Ended July 31 2022 2021 2022 2021 2020 Reconciliation of gross profit and gross margin GAAP gross profit $71,886 $55,560 Plus: Share-based compensation 1,787 1,023 $233,035 3,751 $182,870 $141,772 1,702 1,018 Plus: Employer taxes related to employee stock transactions 34 30 131 54 35 Plus: Amortization of acquired intangible assets Non-GAAP gross profit 2,156 280 1,120 373 $75,863 $56,893 $238,037 GAAP gross margin 80% 82% 83% $184,999 86% $142,825 85% Non-GAAP adjustments 4% 2% 2% 1% 1% Non-GAAP gross margin 84% 84% 85% 87% 86% Reconciliation of operating expenses GAAP research and development $34,014 $22,909 Less: Share-based compensation (10,567) (5,607) $95,690 $64,566 $49,011 (23,764) (11,095) (5,566) Less: Employer taxes related to employee stock transactions (176) (208) (929) (411) (43) Less: Acquisition-related expenses (891) (457) (1,789) (614) Less: Amortization of acquired intangible assets (116) Non-GAAP research and development $22,264 $16,637 $69,208 $52,446 $43,402 Note: Certain figures may not sum due to rounding.#23Reconciliation con't PagerDuty, Inc. Reconciliation of GAAP to Non-GAAP Data (in thousands, except percentages and per share data) (unaudited) Three Months Ended July 31 Year Ended January 31 2022 2021 GAAP sales and marketing $50,331 $40,814 Less: Share-based compensation (8,148) (4,401) 2022 2021 $161,624 $122,155 $97,350 (19,012) (14,733) (8,924) 2020 Less: Employer taxes related to employee stock transactions (145) (157) (765) Less: Amortization of acquired intangible assets (660) (595) (2,380) Non-GAAP sales and marketing $41,378 $35,661 GAAP general and administrative $25,429 $20,294 Less: Share-based compensation (9,623) (5,445) Less: Employer taxes related to employee stock transactions Less: Acquisition-related expenses (166) (315) (8) (2) $77,432 (23,506) (1,192) (319) (596) (794) $139,467 $106,032 $88,216 $62,431 $50,970 (15,701) (11,697) (548) (96) (1,823) (210) Less: Amortization of acquired intangible assets (29) Non-GAAP general and administrative $15,603 $14,536 $52,415 $44,359 $39,177 Reconciliation of operating loss and operating margin GAAP operating loss $(37,888) Plus: Share-based compensation 30,125 $(28,457) 16,476 70,033 Plus: Employer taxes related to employee stock transactions Plus: Amortization of acquired intangible assets 521 710 3,017 $(101,711) $(66,282) $(55,559) 43,231 27,205 384 1,609 2,961 875 3,500 1,167 Plus: Acquisition-related expenses 899 455 2,108 2,437 Non-GAAP operating loss $(3,382) $(9,941) $(23,053) $(17,838) $(27,970) GAAP operating margin (42)% (42)% (36)% (31)% (33)% Non-GAAP adjustments 38% 27% 28% 23% 17% Non-GAAP operating margin (4)% (15)% (8)% (8)% (17)% Note: Certain figures may not sum due to rounding.#24Reconciliation con't PagerDuty, Inc. Reconciliation of GAAP to Non-GAAP Data (in thousands, except percentages and per share data) (unaudited) Reconciliation of net loss Three Months Ended July 31 Year Ended January 31 2022 2021 2022 2021 2020 GAAP net loss attributable to PagerDuty, Inc. Plus: Share-based compensation $(38,499) 30,125 $(29,661) $(107,455) $(68,903) 16,476 70,033 43,231 $(50,339) 27,205 Plus: Employer taxes related to employee stock transactions Plus: Amortization of debt discount and issuance costs(1) 521 710 3,017 1,609 384 468 460 1,805 7,808 Plus: Amortization of acquired intangible assets 2,961 875 3,500 1,167 Plus: Acquisition-related expenses 899 455 2,108 2,437 Plus: Tax benefit associated with acquisition (5,017) Non-GAAP net loss attributable to PagerDuty, Inc. $(3,525) $(10,685) $(26,992) $(17,668) $(22,750) Reconciliation of net loss per share, basic and diluted GAAP net loss per share, basic and diluted, attributable to PagerDuty, Inc. $(0.44) $(0.35) $(1.27) $(0.87) $(0.77) Non-GAAP adjustments to net loss attributable to 0.40 0.23 0.95 0.65 0.42 PagerDuty, Inc. Non-GAAP net loss per share, basic and diluted, attributable to PagerDuty, Inc. Weighted-average shares used in calculating net 83,895 loss per share, basic and diluted $(0.04) $(0.13) $(0.32) $(0.22) $(0.35) 88,153 84,514 79,614 65,544 (1) During the first quarter of fiscal 2022, the Company early adopted ASU 2020-06 which resulted in the elimination of amortization of debt discount on the convertible senior notes from February 1, 2021. Note: Certain figures may not sum due to rounding.#25Reconciliation con't PagerDuty, Inc. Reconciliation of GAAP to Non-GAAP Data (in thousands, except percentages and per share data) (unaudited) Free Cash Flow Three Months Ended July 31 Year Ended January 31 2022 2021 2022 2021 2020 Net cash provided by (used in) operating activities Less: $2,841 $(11,595) $(6,021) $10,095 $(173) Purchases of property and equipment (862) (364) (3,457) (4,038) (5,174) Capitalization of internal-use software costs (965) (915) Free cash flow $1,014 Net cash (used in) provided by investing activities Net cash provided by (used in) financing activities Free cash flow margin $(2,695) $4,465 $(12,874) $36,675 $3,412 (3,353) (810) $(12,831) $5,247 $(5,347) $17,376 $(49,320) $(232,070) $(736) $254,367 $225,944 1% (19)% (5)% 3% (3)% Note: Certain figures may not sum due to rounding.