UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 (Mark One)

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

 For the fiscal year ended January 31, 2025
 or

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from to

 Commission File Number: 001-38856
 (Exact name of registrant as specified in its charter)

 Delaware
 27-2793871

 (State or other jurisdiction of
 incorporation or organization)

 (I.R.S. Employer
 Identification Number)

 600 Townsend St., Suite 200
 San Francisco, California

 94103

 (Address of principal executive offices)
 (Zip Code)

 ( 844) 800-3889
 (Registrant's phone number, including area code)

 Securities registered pursuant to Section 12(b) of the Act:

 Title of each class
 Trading symbol(s)
 Name of each exchange on which registered

 Common Stock, par value $0.000005 per share

 PD

 New York Stock Exchange

 Securities registered pursuant to Section 12(g) of the Act: None

 Indicate by a check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

 Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes No

 If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

 Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive o cers during the relevant recovery period pursuant to §240.10D-1(b).

 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 The aggregate market value of common stock held by non-affiliates of the Registrant, computed by reference to the price at which the common stock was last sold on July 31, 2024, the last business day of the Registrant's most recently completed second fiscal quarter, as reported on the New York Stock Exchange, was approximately $ 1.8 billion. Shares of the registrant's common stock held by each executive officer, director and holder of 5% or more of the outstanding common stock have been excluded as such persons may be deemed to be affiliates. This calculation does not reflect a determination that certain persons are affiliates of the registrant for any other purpose.

 As of March 12, 2025, there were approximately 91,084,454 shares of the registrant's common stock outstanding.

 DOCUMENTS INCORPORATED BY REFERENCE

 Information required in response to Part III of this Annual Report on Form 10-K (Items 10, 11, 12, 13, and 14) is hereby incorporated by reference to portions of the Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held in 2025. The Proxy Statement will be filed by the Registrant with the Securities and Exchange Commission no later than 120 days after the end of the Registrant's fiscal year ended January 31, 2025.

 Page

 Special Note Regarding Forward-Looking Statements

 Item 1. Business

 Item 1A. Risk Factors

 Item 1B. Unresolved Staff Comments

 Item 1C. Cybersecurity

 Item 2. Properties

 Item 3. Legal Proceedings

 Item 4. Mine Safety Disclosures

 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6. [Reserved]

 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A. Quantitative and Qualitative Disclosure About Market Risk

 Item 8. Financial Statements and Supplementary Data

 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A. Controls and Procedures

 Item 9B. Other Information

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10. Directors, Executive Officers and Corporate Governance

 Item 11. Executive Compensation

 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13. Certain Relationships and Related Transactions, and Director Independence

 Item 14. Principal Accounting Fees and Services

 Item 15. Exhibits and Financial Statement Schedules

 Item 16. Form 10-K Summary

 SIGNATURES

 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 This Annual Report on Form 10-K (this "Form 10-K"), contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which statements involve substantial risk and uncertainties. All statements contained in this report other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth and trends, and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "could," "would," "project," "plan," "potentially," "likely," "target," and similar expressions are intended to identify forward-looking statements.

 Forward-looking statements contained in this Form 10-K include, but are not limited to, statements about our expectations regarding:

 • the impact of an economic downturn or recession, rising inflation, or significant market volatility in the global economy on our customers, partners, employees and business;
 • trends in key business metrics, including number of customers and dollar-based net retention rate, and non-GAAP financial measures and their usefulness in evaluating our business;
 • trends in revenue, cost of revenue, and gross margin;
 • trends in operating expenses, including research and development, sales and marketing, and general and administrative expense, and expectations regarding these expenses as a percentage of revenue;
 • our existing cash and cash equivalents and cash provided by sales of our subscriptions being sufficient to support working capital and capital expenditures for at least the next 12 months and our ability to meet longer-term expected future cash requirements and obligations, through a combination of cash flows from operating activities and available cash and short-term investment balances;
 • our ability to effectively identify, acquire, and integrate complementary companies, technologies, and assets, including our ability to successfully integrate artificial intelligence and machine learning in our offerings;
 • our ability to service the interest on our convertible notes and repay such notes, to the extent required;
 • our efforts to maintain proper and effective internal controls;
 • our ability to expand our operations and increase adoption of our platform internationally;
 • our ability to stay abreast of new or modified laws and regulations that currently apply or become applicable to our business both in the United States and internationally; and
 • other statements regarding our future operations, financial condition, and prospects and business strategies.

 Such forward-looking statements are based on our expectations as of the date of this filing and are subject to a number of risks, uncertainties and assumptions, including but not limited to, risks detailed in the "Risk Factors" section of this Form 10-K. Readers are urged to carefully review and consider the various disclosures made in this Form 10-K and in other documents we file from time to time with the Securities and Exchange Commission (the "SEC"), that disclose risks and uncertainties that may affect our business. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the effect of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Form 10-K may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

 You should not rely on forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or may not occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. In addition, the forward-looking statements in this Form 10-K are made as of the date of this filing, and we do not undertake, and expressly disclaim any duty, to update any of these forward-looking statements for any reason after the date of this Form 10-K or to conform these statements to actual results or revised expectations.

 Item 1. Business

 Overview

 PagerDuty, Inc. ("PagerDuty," "we," "us" or "our") is a global leader in digital operations management, enabling customers to achieve operational efficiency at scale and transform critical work for modern enterprises. The PagerDuty Operations Cloud combines artificial intelligence ("AI") operations ("AIOps"), automation, customer service operations, and incident management with a generative AI assistant to create a flexible, resilient, and scalable platform to protect revenue and improve customer experience, accelerate innovation, improve operational efficiency, and mitigate risk of operational failures.

 Today, nearly every business is a digital business. From retail to financial services, from travel and entertainment to supply chain logistics, everyday commerce relies on an incredibly complex network of digital infrastructure, systems, software, and teams. And while that complexity is only increasing, the need for those digital operations to be resilient is also rising, as organizations face pressure to meet escalating customer expectations, resolve incidents proactively, and deliver innovation without increasing costs. In this environment, the ability to anticipate, orchestrate, and resolve time-sensitive, critical and unplanned work before it escalates is a critical requirement for success.

 Since our founding in 2009, we have expanded our capabilities from a single product focused on on-call management for developers to a multi-product platform that crosses the silos of development, information technology ("IT") infrastructure and operations, security, customer service, and business operations and reaches executive stakeholder roles across an organization. Today, we collect data and digital signals from virtually any software-enabled system or device and leverage AI and machine learning to correlate, process, and predict opportunities and incidents. Using incident management, automation, AI operations, and customer service operations, our platform for digital operations brings together the right people with the right information so they can resolve issues and act on opportunities in minutes or seconds from wherever they are. In addition, our generative AI capabilities allow organizations to manage mission-critical tasks smarter and faster.

 We have spent more than a decade building deep product integrations to our platform, and our ecosystem now includes over 700 direct integrations to enable our customers to gather and correlate digital signals from their technology stack. This allows technical teams to collect digital signals from nearly any system or platform in their environment without the effects of context switching. Those same integrations connect with popular collaboration tools and business applications within modern and legacy technology stacks to drive automation of work.

 We generate revenue primarily from cloud-hosted software subscription fees. We also generate revenue from term-license software subscription fees. PagerDuty has a land-and-expand business model that leads to viral adoption and expansion of our products. Although the PagerDuty platform can be used by any size of company, from small to mid-market to enterprise companies, we have increasingly focused our go-to-market motion, including our field sales team, on serving enterprise customers. Nearly half of the Fortune 500 and approximately two thirds of the Fortune 100 rely on PagerDuty as essential infrastructure for the modern enterprise.

 The PagerDuty sales and customer success teams drive expansion to additional users, new use cases, and additional products, as well as upgrades to higher-value plans. Our enterprise customers account for the majority of our revenue today. The PagerDuty platform is central to customer initiatives targeted at incident management transformation, operations center modernization, automation standardization, and customer experience operations. Our platform provides the technology to solve the customer problems underlying these and many other business initiatives.

 Our business has experienced rapid growth since our inception. For the fiscal years ended January 31, 2025 and 2024, our revenue was $467.5 million and $430.7 million, respectively. We continue to invest in our business and had a net loss attributable to PagerDuty of $42.7 million and $75.2 million for the fiscal years ended January 31, 2025 and 2024, respectively.

 Our Platform and Key Customer Benefits

 We have invested aggressively in research and development to build innovative products that leverage AI and automation to deliver value to our customers. Our cloud-first platform is differentiated based on a broad range of attributes:

 • Built for time-sensitive, mission-critical operations. Our platform is purpose-built to manage the real-time needs of modern digital operations. Our customers are navigating complex hybrid-cloud and microservices-based environments that are constantly changing state. This requires the ability to manage the entire service lifecycle from collecting data, interpreting digital signals, mobilizing a response when needed, and providing insights - all in real time. There is no concept of queued tickets or queued work on our platform because we are built to understand these situations and solve incidents within seconds or minutes.
 • Over a decade of data from over 15,000 paying customers. As pioneers in digital operations management, we have a rich repository of machine-generated and human response data. We leverage our experience from incidents, changes, events, and incident resolutions to build advanced machine-learning capabilities. This AI-driven approach is designed to accelerate our customers' initiatives to continuously improve and transform their operations by providing rich contextual insights and in-depth analytics, which enable benchmarking and recommendations, allowing for the implementation of best practices.
 • Over 700 integrations across the technology ecosystem. We have invested extensively in an ecosystem that includes over 700 integrations, allowing us to harness data from software-enabled systems and devices. We have deep integrations to a range of widely used technologies, such as Amazon Web Services ("AWS"), HashiCorp, New Relic, and Splunk, and many bidirectional integrations such as Atlassian, Microsoft VSTS, Salesforce, ServiceNow, and Slack. Our integrations support a broad range of use cases across development, IT, security, customer service and support, and other business functions. We provide capabilities through which our users can easily build integrations themselves and connect our products with other third-party technologies.
 • Breadth of functionality. The PagerDuty Operations Cloud combines AIOps, automation, incident management, and customer service operations into a platform for mission-critical, time-critical operations work in the modern enterprise. Through the power of AI and automation, it detects and diagnoses disruptive events, mobilizing the right response, and streamlines infrastructure and workflows across digital operations. PagerDuty delivers resiliency, fidelity, and high availability at scale, while creating capacity for teams by keeping them in-context and in-flow. We have embedded machine learning, automation, AI, insights, and best practices across our products to help our customers realize value quickly.
 • Proactive. We are leading a shift from efficient response to intelligent automation to help teams prevent incidents from occurring. We continue to invest in design and innovation capabilities to create proactive and predictive operations with our AI-enabled solutions, including AIOps, event orchestration, automation, and PagerDuty Advance.
 • Combine intelligent automation and team mobilization. We combine process automation technology with team mobilization to serve up proposed automation routines to the right responder, with the option to initiate it with the click of a button. This enables tier one responders with the easy press-button automation of powerful remediation steps to cut critical minutes out of outages and incidents.
 • Secure, resilient, and scalable. Our customers depend on us for their digital operations needs. When their systems fail, we need to be operational. We have built multiple redundancies into our infrastructure, including multiple cloud regions, availability zones, and communications, with no maintenance windows, so our customers can rely on our always-on platform. We have delivered 99.99% availability to our customers over the past 24 months. Security is a critical customer requirement, and we have governance, robust access control policies, and vulnerability management to support the needs of our customers.
 • Designed for users and teams. Our software is easy to adopt and use. We provide a simple, self-service onboarding experience so teams can be up and running in minutes. Our products are mobile-first and include intuitive navigation. Customers can easily extend our platform across teams and multiple use cases within an organization.
 • Technology agnostic. We are agnostic to our customer's technology stack and provide them the choice to use the technologies that meet their needs. We are flexible, modular, and open in our approach to building our platform with a powerful application programming interface ("API") to enable rapid integrations into even the most complex environments. Our open technology and broad range of integrations ensures that we can effectively co-exist with our customers' technology, including our chat experience, which includes Slack and Teams to allow users to work in their preferred tools and working environments.

 • Enhanced productivity. PagerDuty empowers the full return on investment ("ROI") of our customers' technology stack, using machine learning, AI, automation, auto-remediation, and self-healing to bring together the right people with the right information to generate the appropriate action, in real time, when seconds matter.

 The PagerDuty Operations Cloud consists of the following products that empower teams to address broader digital operations management requirements.

 • Incident Management. PagerDuty Incident Management provides a real-time view across the status of a digital service while incorporating intelligent noise reduction to remove false positives. We empower users to take the right actions in real time, every time an incident occurs. With PagerDuty, users can shift towards a proactive, AI-powered approach to improve operational resilience by automating response, accelerating resolution, and preventing future occurrences with a unified platform that manages incidents end-to-end - from automated precision response, to business-wide orchestration, to major incident learning.
 • AIOps. PagerDuty AIOps empowers users to gain powerful context and noise reduction at scale by applying machine learning to correlate and automate the identification of incidents from billions of events. Customers ingest and normalize events from essentially any source, and extract signal from the noise with intelligent alert grouping, enrichment and triage support, change intelligence, and dynamic routing leading to fewer incidents and faster resolution.
 • Automation. PagerDuty Automation provides a centralized design-time and run-time environment for orchestrating automated workflows that span across departments, technologies, and networks. Users can speed up operations and resolve incidents faster while lowering operating costs, and reducing risk and liability. With self-service functionality, organizations can safely extend operations privileges to other teams and business units.
 • Customer Service Operations. PagerDuty for Customer Service makes it easy to orchestrate, automate, and scale your response to customer impacting issues. With time-critical operations data, two-way communication, and a fully integrated tool stack, we provide what our customers need to act as a unit and resolve issues faster. During an incident, customers receive proactive and clear information on service status, resolution activities, and the ability to escalate, directly from within today's most popular case management platforms.
 • Artificial Intelligence. PagerDuty Advance is a set of generative AI capabilities for the PagerDuty operations cloud. From summarizing key information about an incident to authoring automation jobs, PagerDuty Advance supports humans by reducing the burden of repetitive and time-consuming tasks. Additionally, PagerDuty's AI solutions play a vital role in driving faster and better decision-making by identifying next best action, generation of status updates, automatic generation of post-incident summaries, and more.

 Our Growth Strategies

 • Land new customers. We will continue to target new customers by leveraging our trusted brand and efficient go-to-market strategy, which combines self-serve viral adoption for all customers with a focused direct sales effort for potential enterprise customers. We will leverage partner growth pathways and continue to build our partner ecosystem to drive value, awareness, sales, and adoption of our products. We will continue to target potential customers with community building and marketing programs, which include digital campaigns, user events, executive programming, broader industry events, customer marketing activities, and partner and ecosystem engagement.
 • Expand usage within our existing customer base across development, IT infrastructure and operations, security operations, customer service, and support, as well as with new user groups such as business and industrial operations. Our direct sales efforts are focused on enterprise and large customers, positioning our solutions through business value-led engagement with executives and technology buyers. At small and midsize companies, development and IT professionals often make an initial purchase of our platform for a small number of users and then expand users and add products over time. We continue to advance our sales, service and customer success efforts and how we work with partners to demonstrate business value to our customers that drives increased adoption by teams and users of our solutions.

 • Introduce new products and solutions. We will continue to make investments in research and development to bolster our existing solutions and products, increase the reach of our integrations, and innovate on our platform. Our expanding portfolio of solutions provides us additional opportunities to create business value for customers that results in upsell and cross-sell expansion growth. In addition to internal development, we can expand our product portfolio and offerings through partnerships and acquisitions.
 • Grow our international presence. We will build on our success by growing our sales outside North America, particularly in EMEA, Asia Pacific, and Japan. The self-service, low friction nature of our offering allows us to expand our reach, through direct sales and partners, into other regions where we see significant opportunity. Our international operations generated 28% of our revenue in the fiscal year ended January 31, 2025.
 • Grow our U.S. public sector and Federal presence. In March 2024, we announced our approval for "In Process" status within the Federal Risk and Authorization Management Program ("FedRAMP ") Marketplace. We have a growing presence in the U.S. public sector and expect that the FedRAMP authorization will increase our access in this market.

 Our Market Opportunity

 Our platform has demonstrated core use cases across development, IT infrastructure and operations, customer service and support, security operations and other business functions. We estimated that in 2024, there were approximately 87 million potential users worldwide in the development, IT infrastructure and operations, customer service and support, and security operations segments, comprised of approximately:

 •30.0 million development personnel
 •23.0 million IT operations personnel
 •28.0 million customer service and support personnel
 •6.0 million security operations personnel

 We estimate our total addressable market is approximately $50 billion. To calculate our total addressable market, we multiply our estimate of 87 million potential users by our applicable product average revenue per user. We believe that we have approximately 1% penetration worldwide within these markets. In addition to our core use cases, we are seeing customers use our platform across their business operations and industrial operations.

 Customer Success

 We are committed to the success of our customers. This means delivering recurring value via performance improvements that enable our customers to mature their digital initiatives. The key to delivering recurring value is rapid implementation of our PagerDuty capabilities with a focus on continuous improvement throughout our relationship. We assist our customers by enhancing their ability to operate in real-time via cross-functional data telemetry, workflows in engineering, IT, security, customer support, executive leadership, and across their entire employee base.

 To assist companies in the advancement of their digital journeys, our customer success team is structured to provide expertise through the entire customer lifecycle from onboarding, adoption of our platform, business value realization, and renewal. Technical industry experts, architects, and consultants assist customers with rapid deployment using workflow optimization and PagerDuty best practices. For continuous learning, we provide in-depth instructor-led and self-paced courses to certify our customers and partners on products, technology, and best practices. The support teams respond to our customers' queries related to our products via a multi-channel environment from no-fee to paid 24/7 support with service-level agreements. The renewals team works proactively to reduce customer churn and downgrade and provide customers with a positive on-time renewal experience.

 Research and Development

 Our research and development team consists of our engineering, product management, user experience, and technical operations teams. These groups are responsible for the design, development, testing, delivery, and support of new and existing technologies and features for our platform. They are also responsible for scaling our platform and improving our cloud infrastructure and ultimately, our high availability. We invest substantial resources in research and development to drive core technology innovation and bring new products to market. Our distributed research and development efforts enable us to attract the best talent across our multiple locations, including San Francisco, Atlanta, Toronto, and Lisbon as well as fully remote workers not located near our hubs.

 Sales and Marketing

 We employ a go-to-market strategy organized around the size of a company and industry vertical. We principally deploy a high-touch sales-led motion for enterprise customers in our key verticals and largely a programmatic and product-led motion for smaller and mid-market customers.

 For enterprise customers, our field sales teams orient around engagement with senior IT, engineering, and business operations management and our marketing strategies align to the business problems we solve for these leaders. We drive demand and brand differentiation through a mix of digital, account-based, and event-driven initiatives targeted at enterprise decision-makers. Additionally, customer awareness and adoption is driven through word of mouth, brand development with a high-velocity programmatic and product-led sales motion for both the initial land of new customers and the subsequent expansion of smaller and mid-market customers.

 We also host and present at regional, national, and global events to engage both customers and prospects, deliver product training, share best practices, and foster community. Our technical leaders and evangelists frequently speak as subject matter experts at market-leading developer events.

 Our global sales teams focus on both new customer acquisition and up-selling and cross-selling additional products to our existing customers. Our sales teams are primarily organized by geography, consisting of the Americas, EMEA, Asia Pacific, and Japan. In the Americas, we have a sales team specifically focused on the public sector. In addition, we factor in target company size and industry vertical in creating our sales teams.

 PagerDuty Incident Management is offered as four plan options offered on a per-user basis - Free, Professional, Business and Enterprise - to address increasingly complex requirements. Customers may begin their journey on the PagerDuty platform with the Free plan for up to five users and grow into full Enterprise capabilities with thousands of users.

 PagerDuty AIOps empowers customers to optimize costs associated with unplanned operations. Leveraging unsupervised machine learning, integrated automation, and event management, the solution detects and mitigates incidents in real time. AIOps is offered under a consumption model supporting tiers of consumption events.

 PagerDuty for Customer Service Operations connects and bridges the gap between customer cases from customer service teams and incidents for IT operations and Development teams. It is offered in three plan options similar to our Incident Management plans on a per-user basis - Professional, Business, and Enterprise.

 PagerDuty Automation allows customers to automate runbooks and workflows for both their planned and unplanned work in their development and IT environments. It can be used standalone or integrated with our Incident Management and AIOps products and is provided in both a software-as-a-service ("SaaS") and self-hosted model.

 PagerDuty Advance leverages generative AI capabilities to accelerate mission-critical work and mitigate operational risk. It is available on a usage basis to term customers of PagerDuty Incident Management.

 Competition

 The PagerDuty Operations Cloud provides a leading platform for modern digital operations. We deliver full operations lifecycle management (from detection to response orchestration, to remediation, learning, and prevention), which is complemented with capabilities to deliver deep AIOps insights, and automate processes and workflows in and adjacent to incident management. As a result, we face competition from vendors who provide similar capabilities in some of our product areas, including Atlassian, Splunk, Red Hat, Everbridge, ServiceNow, and others. We also face competition from homegrown/in-house solutions. As we continue to expand our offerings in emerging areas, including automation and AI, we expect competition from other vendors focused on these areas.

 Key competitive factors include total cost of ownership, product functionality, breadth of offerings, security, flexibility, and performance. PagerDuty is confident in our favorable positioning against competitors across these factors. The potential introduction of new technologies by existing competitors could impact demand for our services. Additionally, we face pricing pressures as some competitors offer dramatically lower prices to get their foot into accounts before they increase prices in the future. Larger competitors, in particular, possess the operational flexibility to bundle competing products and services within broader software offerings, often presenting them at a reduced price.

 Seasonality

 We experience seasonality in our billings, bookings, and other operating results. The first fiscal quarter of each year is usually our lowest billings and bookings quarter. Billings and bookings during our first fiscal quarter are typically lower than the prior fiscal fourth quarter. We believe that this results from the procurement, budgeting, and deployment cycles of many of our customers, particularly our enterprise customers. We expect that this seasonality will continue to affect our billings, bookings, and other operating results as we continue to target larger enterprise customers.

 Intellectual Property

 We rely on a combination of trade secrets, patents, copyrights, and trademarks, as well as contractual and other protections, to establish and protect our intellectual property rights. We had 25 issued patents and 45 patent applications pending examination in the United States as of January 31, 2025 that, with respect to issued patents, are expected to have terms ending between 2033 and 2043. We pursue the registration of domain names, trademarks, and service marks in the United States and in various jurisdictions outside the United States. We do not believe that we are materially dependent on any one or more of our patents or other intellectual property rights.

 We control access to and use of our proprietary technology and other confidential information through the use of internal and external controls, including contractual protections with employees, contractors, customers, and partners, and our software is protected by U.S. and international intellectual property laws. We require our employees, consultants, and other third parties to enter into confidentiality and proprietary rights agreements and control access to software, documentation, and other proprietary information. Our policy is to require employees and independent contractors to sign agreements assigning to us any inventions, trade secrets, works of authorship, developments, and other processes generated by them on our behalf and agreeing to protect our confidential information. In addition, we generally enter into confidentiality agreements with our vendors and customers as well as restrictive license and service use provisions with customers.

 Although we rely on intellectual property rights, including trade secrets, patents, copyrights, and trademarks, as well as contractual protections to establish and protect our proprietary rights, we believe that factors such as the technological and creative skills of our personnel, creation of new modules, features and functionality, and frequent enhancements to our platform are more essential to establishing and maintaining our technology leadership position.

 Regulatory

 We are subject to a number of U.S. federal and state and foreign laws, regulations, federal acquisition regulations, and other legal requirements that involve matters central to our business. These laws and regulations may involve data privacy, security, intellectual property, competition, consumer protection, export, taxation, or other subjects. Many of the laws and regulations to which we are subject are still evolving, subject to change, and being tested in courts, and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often are uncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolve rapidly, it is possible that we may not be, or may not have been, compliant with each such applicable law or regulation. For a discussion of risks related to these various areas of government regulation, see "Risk Factors—We are subject to evolving and increasingly stringent U.S. and foreign laws, regulations, rules, contractual obligations, policies and other legal obligations related to data privacy and security. Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; adverse publicity and reputational damage; loss of revenue or profits; loss of customers or sales; decrease the price of our common stock; and other adverse business consequences."

 Geographic Information

 For a description of our revenue and long-lived assets by geographic location, see Note 15. Geographic Information in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

 Human Capital

 Our corporate culture is a critical component of our success, and we will continue taking steps to help foster innovation, teamwork, and inclusion. We promote an environment that values the democratization of ideas and the adoption of a DevOps culture internally, resulting in a mindset that is empowering our team to be more innovative, productive, and collaborative. We are continually investing in our global workforce to create a sense of belonging, provide fair and market-competitive total rewards to engage our employees, support our employees' well-being, and foster their growth and development. As of January 31, 2025, we had 1,242 employees, of which approximately 55% were in the United States and 45% were in our international locations. None of our employees are represented by a labor union with respect to his or her employment. We have not experienced any work stoppages and we consider our relations with our employees to be good.

 Global Belonging

 Our vision is to build an equitable world where we transform critical work so all teams can delight their customers and build trust. At PagerDuty, we are committed to fostering a culture that supports our customers, employees, and communities through fair business practices. We are dedicated to ensuring that no employee is discriminated against based on race, nationality, gender, religion, sexual orientation, disability, or any other characteristic protected by law.

 We empower Dutonians - employees of all backgrounds - to champion our customers and cultivate a culture of global engagement and belonging. To achieve this, we focus on creating a workplace where everyone feels welcome, safe, and heard. By aligning our efforts with the needs of our customers, employees, and community, our people-related initiatives foster meaningful connections, inspire innovation, and enable Dutonians to actively contribute.

 Through tailored programs and initiatives, we strive to create a workplace that supports personal and professional growth, encourages innovation, and empowers Dutonians to make a meaningful impact to deliver value to our stakeholders. We offer all Dutonians opportunities to connect authentically, celebrate our workforce, and model our core values. These volunteer-driven opportunities inspire engagement and collaboration that drive our company's objectives and success.

 Compensation, Benefits, and Well-Being

 We offer competitive compensation and benefits that support our employees' overall well-being and attract, motivate, and retain a talented workforce, rewarding employees for their performance contributions and impact. Our employee pay programs and practices are designed to drive innovation, align pay to level of performance, and reflect PagerDuty's cultural values and goals. We regularly evaluate our total rewards programs to ensure we are providing an employee value proposition that is competitive with a constantly changing market, as well as meets a hierarchy of needs of our employees. Aligned with our company strategy and objectives, our compensation programs include fixed base salary and opportunities for short-term and long-term variable incentives for those eligible. We offer a wide variety of benefits including, but not limited to, medical, dental, and vision benefits, flexible spending and health savings accounts, generous paid time-off and leave programs, and retirement plans. We also provide emotional well-being services through our employee assistance program and a variety of other behavioral health support applications.

 Employee Engagement and Development

 We are deeply committed and invested in ensuring our employees are provided with the resources and tools to not only thrive at PagerDuty, but to work better together as a global company. Our focus is to increase employee engagement throughout the entire employee lifecycle through intentional listening, activating our company values and practice, and communicating our employee value proposition to employees, customers and partners. Through different methods of listening, such as our periodic engagement surveys, we gather specific feedback on drivers of engagement to better create an engaging experience for all Dutonians. Our team equips our leaders with the coaching and training necessary to have conversations with our employees to empower them to own and drive their career development goals. We strive to provide a holistic experience where our employees feel engaged and connected to our company's goals, as well as seeing themselves growing and developing within our organization.

 Global Impact and Sustainability Initiatives

 We launched PagerDuty.org in 2018 to help make a sustainable contribution to the communities in which we live, work, and serve by adding value to the planet and society, and therefore, to the company. PagerDuty.org empowers mission-driven teams to build a more equitable world and sustainable future. We do so by helping social impact organizations automate critical work and increase team productivity while reducing costs through our technology platform; deploying funding to advance equitable health and climate outcomes; and activating employees to create meaningful impact; and responsibly and ethically using our resources.

 As a Pledge 1% member since 2017, we commit 1% of equity, 1% of product, and 1% of employee time to advance positive community impact. In June 2018, we fulfilled our equity pledge by issuing a warrant to purchase shares of our common stock to the Tides Foundation to fund our philanthropic giving. The PagerDuty.org Fund amplifies partner impact through unrestricted funding, donated product, and technical employee pro bono expertise. We deployed approximately $1.3 million in the fiscal year ended January 31, 2025, to advance the work of tech-forward organizations in crisis-response, crisis lines, and food equity. Through our Impact Accelerator program, we continue to support organizations advancing crisis response and mental health services, including Crisis Text Line, EmpowerWork, NAMI, TrekMedics, Turn.io, and YouthAlive!. These organizations are reimagining emergency care rooted in equity, tackling public health challenges using sensor technologies and data analytics, and healing communities by breaking the cycle of violence. Further, we continue to empower PagerDuty Employee Resource Groups and global impact champions to deploy funds to organizations and issues aligned to their community through our employee-led community grantmaking program.

 Our employee impact programs are designed to engage employees in these sorts of initiatives throughout their tenure, beginning with new hire onboarding. Our volunteer time off policy offers employees 20 hours annually to volunteer and vote. In 2023, we launched a gift-matching program to amplify employee donations to eligible nonprofit organizations, providing a capped 1:1 match for employee contributions. Beginning with new hires, our rewards and recognition programs celebrate the contributions employees make in giving their time, expertise, or capital. 83% of our employees participated in volunteering or giving in 2024, with 83% citing that "PagerDuty's investment in social impact makes me proud to work here."

 In 2021, PagerDuty expanded its tailored support to mission-driven organizations, enabling nonprofit organizations, B Corps, and higher education institutions globally to more easily access critical technology that saves them time and money, so they can focus their efforts on their most essential work. Our impact pricing offering includes five free Professional user licenses, up to 40% off additional products, and expanded onboarding and training resources. Through our technical pro bono program, employees provide technical expertise to help impact customers implement or optimize their use of PagerDuty. As of January 31, 2025, we serve 585 Impact Customers representing $4.9 million ARR.

 Our sustainability strategy and priorities are managed by our Environmental, Social and Governance Steering Committee, and are implemented by our Environmental, Social and Governance Working Group, composed of cross-functional business leaders, to help ensure that our business produces positive impact. The Nominating and Corporate Governance Committee of our board of directors has oversight over environmental, social and governance initiatives, per its charter. We periodically conduct materiality assessments to guide our impact priorities, and perform a comprehensive inventory covering all three scopes of greenhouse gas emissions to assess our carbon footprint. We have developed the following science-aligned climate targets that were validated in FY25 by the Science Based Targets Initiative ("SBTi"): "PagerDuty, Inc. commits to reduce absolute scope 1 and 2 GHG emissions 42% by FY2030 from a FY2023 base year; to reduce absolute scope 3 GHG emissions 25% by FY2030 from a FY2023 base year; and further to increase active annual sourcing of renewable electricity from 0% in FY2023 to 100% by FY2030." In FY25, we achieved the goal of actively sourcing 100% renewable electricity, several years ahead of our target.

 PagerDuty performs annual impact reporting to articulate our progress against our global impact, sustainability, and global belonging goals and commitments.

 Available Information

 We make available, free of charge through our website (www.pagerduty.com), our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to Sections 13(a) or Section 15(d) of the Exchange Act, as soon as reasonably practicable after they have been electronically filed with, or furnished to, the Securities and Exchange Commission.

 The Securities and Exchange Commission maintains an internet site ( that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Securities and Exchange Commission.

 We announce material information to the public about us, our products and services and other matters through a variety of means, including our website (www.pagerduty.com), the investor relations section of our website (investor.pagerduty.com), our blog (pagerduty.com/blog), press releases, filings with the Securities and Exchange Commission, public conference calls, and social media, including our X (formerly Twitter) account (twitter.com/pagerduty), the X account @jenntejada and Facebook page (facebook.com/pagerduty), in order to achieve broad, non-exclusionary distribution of information to the public. We encourage investors and others to review the information we make public in these locations, as such information could be deemed to be material information.

 Item 1A. Risk Factors
 Our business involves significant risks, some of which are described below. You should carefully consider the following risks, together with all of the other information in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. Any of the following risks could have an adverse effect on our business, results of operations, financial condition, or prospects, and could cause the trading price of our common stock to decline. Our business, results of operations, financial condition, or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material.

 Risk Factors Summary

 This summary provides an overview of the risks we face and should not be considered a substitute for the more fulsome risk factors discussed immediately following this summary.

 • We have a history of operating losses and may not achieve or sustain profitability in the future.
 • If we are unable to attract new customers, our revenue growth will be adversely affected.
 • If we are unable to retain our current customers or sell additional functionality and services to them, our revenue growth will be adversely affected.
 • We derive a significant majority of our revenue from a single product.
 • The markets in which we participate are competitive, and if we do not compete effectively, our operating results could be harmed.
 • Seasonality may cause fluctuations in our sales and operating results.
 • If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing customer needs, requirements, or preferences, our products may become less competitive.
 • Failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our products.
 • If we are unable to enhance and improve our platform or develop new functionality or use cases, our revenue may not grow.
 • Unfavorable conditions in our industry or the global economy, or reductions in information technology spending, could limit our ability to grow our business and negatively affect our results of operations.
 • The estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all.
 • If our information technology systems or those of third parties with whom we work or our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including, but not limited to, significant costs, litigation and regulatory investigations and actions, harm to our reputation, loss of revenue or profits, loss of customers, and other adverse consequences.
 • Interruptions or delays in performance of our service could result in customer dissatisfaction, damage to our reputation, loss of customers, limited growth, and reduction in revenue.
 • If we do not or cannot maintain the compatibility of our platform with third-party applications that our customers use in their businesses, our revenue and growth prospects will decline.

 Risks Related to Our Business and Industry

 We have a history of operating losses and may not achieve or sustain profitability in the future.

 We were incorporated in 2010 and have experienced net losses since inception. We generated a net loss attributable to PagerDuty, Inc. of $42.7 million, $75.2 million, and $128.4 million for the fiscal years ended January 31, 2025, 2024, and 2023 respectively, and as of January 31, 2025, we had an accumulated deficit of $595.2 million. We are not certain whether or when we will obtain a high enough volume of sales to sustain or increase our growth or achieve or maintain profitability in the future. We also expect our costs and expenses to increase in future periods, which could negatively affect our future operating results if our revenue does not increase. In particular, we intend to continue to expend significant funds to further develop our platform, including by introducing new products and functionality, and to expand our inside and field sales and customer success teams to drive new customer adoption, expand use cases and integrations, and continue international expansion. We also face increased compliance costs associated with growth, and the expansion of our customer base. Our efforts to grow our business may be costlier than we expect, and we may not be able to increase our revenue enough to offset our increased operating expenses. We may incur significant losses in the future for a number of reasons, including the other risks described herein, and unforeseen expenses, difficulties, complications and delays, and other unknown events. If we are unable to achieve and sustain profitability, the value of our business and common stock may significantly decrease.

 Our prior growth may not be indicative of our future growth, and, we may not be able to manage any additional growth effectively. Our growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.

 Our revenue was $467.5 million, $430.7 million, and $370.8 million for the fiscal years ended January 31, 2025, 2024, and 2023, respectively. Although we have historically experienced significant growth in our revenue, even if our revenue continues to increase, our revenue growth rate has declined and may decline in the future as a result of a variety of factors, including the maturation of our business. Overall growth of our revenue depends on a number of factors, including our ability to:

 • price our digital operations platform effectively so that we are able to attract new customers and expand sales to our existing customers;
 • expand the functionality and use cases for the products we offer on our platform;
 • maintain or increase the rates at which customers purchase and renew subscriptions to our platform;
 • provide our customers with customer support that meets their needs;
 • continue to introduce our products to new markets;
 • successfully identify and acquire or invest in businesses, products, or technologies that we believe could complement or expand our platform; and
 • increase awareness of our brand on a global basis and successfully compete with other companies.

 We may not successfully accomplish any of these objectives, which makes it difficult for us to forecast our future operating results. If the assumptions that we use to plan our business are incorrect or change in reaction to market changes, or if we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile, and it may be difficult to achieve and maintain profitability. You should not rely on our revenue for any prior quarterly or annual periods as any indication of our future revenue or revenue growth.

 In addition, we expect to continue to expend substantial financial and other resources on:

 • sales and marketing, including expansion to serve customers internationally;
 • our technology infrastructure, including systems architecture, scalability, availability, performance, and security;
 • product development, including investments in our product development team and the development of new products and new functionality for our platform;
 • acquisitions or strategic investments;
 • international expansion; and
 • general administration, including legal, accounting, and compliance expenses associated with operating as public company.

 These investments may not result in increased revenue growth in our business. If we are unable to increase our revenue at a rate sufficient to offset the expected increase in our costs, our business, financial position, and results of operations will be harmed, and we may not be able to achieve or maintain profitability over the long term. Additionally, we may encounter unforeseen operating expenses, difficulties, complications, delays, and other unknown factors that may result in losses in future periods. If our revenue growth does not meet our expectations in future periods, our financial performance may be harmed, and we may not achieve or maintain profitability in the future.

 We operate in an emerging and evolving market, which may develop more slowly or differently than we expect. If our market does not grow as we expect, or if we cannot expand our platform to meet the demands of this market, our revenue may fail to grow or even decline, and we may incur additional operating losses.

 The market segment for digital operations management solutions, particularly enterprise-grade solutions, is still in a relatively early stage of development, and it is uncertain whether this market will continue to develop, how rapidly it will continue to develop, how much it will grow, or whether our platform will be widely adopted. Our success will depend, to a substantial extent, on the widespread adoption of our platform as an alternative to existing solutions or adoption by customers that are not using any such solutions at all. Some organizations may be reluctant or unwilling to use our platform for a number of reasons, including concerns about additional costs, uncertainty regarding the reliability and security of cloud-based offerings, or lack of awareness of the benefits of our platform or preference for other products with similar features that are available, sometimes at no cost, from their existing enterprise software providers. Our ability to expand sales subscriptions of our platform depends on several factors, including potential customer awareness of our platform; the timely completion, introduction, and market acceptance of enhancements to our platform or new products that we may introduce; our ability to attract, retain, and effectively train inside and field sales personnel; our ability to develop or maintain integrations with partners; the effectiveness of our marketing programs; the costs of our platform; and the success of our competitors. If we are unsuccessful in developing and marketing our platform, or if organizations do not perceive or value the benefits of our platform, the market for our platform might not continue to develop or might develop more slowly than we expect, either of which would harm our growth prospects and operating results.

 If we are unable to attract new customers, our revenue growth will be adversely affected.

 To increase our revenue, we must continue to attract new customers, convert free customers to paying customers and increase sales to existing customers. Our ability to sell subscriptions for our products has in the past been and could in the future be impaired due to competitors introducing lower cost or differentiated products or services that are perceived to compete with our platform, and could also be impaired by market segment maturation and evolution of product and service offerings. Similarly, our subscription sales have in the past been and may in the future be adversely affected by customers or users within these organizations perceiving our products as having premium features that are not essential to their businesses, determining that features incorporated into competitive products reduce the need for our products or preferring to purchase competing products that are bundled with solutions offered by other companies, including our partners, that operate in adjacent market segments. Further, the current macroeconomic environment has made it more difficult to attract new customers and expand with existing customers, as we have seen customers display a higher level of scrutiny with their enterprise software spending and require additional sales support. As a result of these and other factors, we may be unable to attract new customers, which could have an adverse effect on our business, revenue, gross margins, and other operating results, and accordingly, on the trading price of our common stock.

 Our previous and any future restructuring efforts may not result in the anticipated savings or operational efficiencies we expected, could result in greater total costs and expenses than we estimated, and could disrupt our business.

 We have undertaken, and may undertake from time to time in the future, certain restructuring efforts to drive more efficient growth and advance our scaling initiatives. We may not realize, in full or in part, the anticipated benefits and savings from such restructuring efforts.

 Furthermore, restructuring efforts may be disruptive to our operations. For example, headcount reductions could yield unanticipated consequences, such as attrition beyond planned staff reductions, increased difficulties in our day-to-day operations, and reduced employee morale. If employees who were not affected by a reduction in headcount seek alternative employment, this could result in unplanned additional expense to ensure adequate resourcing or harm our productivity. Headcount reductions could also harm our ability to attract and retain qualified management, sales, marketing, engineering, and other personnel who are critical to our business. If we are unable to realize the expected operational efficiencies and cost savings from a restructuring, our operating results and financial condition would be adversely affected.

 If we are unable to retain our current customers or sell additional functionality and services to them, our revenue growth will be adversely affected.

 To increase our revenue, in addition to selling to new customers, we must retain existing customers and convince them to expand their use of our platform across their organizations — in terms of increasing the number of users, subscribing for additional functionality, and broadening the user base across multiple departments and business units. Our ability to retain our customers and increase the amount of their subscriptions could be impaired for a variety of reasons, including customer reaction to changes in the pricing of our products or the other risks described herein such as the macroeconomic environment. As a result, we may be unable to renew our subscriptions with existing customers or attract new business from existing customers, which would have an adverse effect on our business, revenue, gross margins, and other operating results, and accordingly, the trading price of our common stock.

 Our ability to sell additional functionality and services to our existing customers may require more sophisticated and costly sales efforts, especially as we target larger enterprises and more senior management who make these purchasing decisions. Similarly, the rate at which our customers purchase additional products and services from us depends on a number of factors, including general economic conditions and the pricing of the additional product functionality and services. If our efforts to sell additional functionality and services to our customers are not successful, our business and growth prospects would suffer.

 Our customers have no obligation to renew their subscriptions with us after the expiration of their subscription period. Our subscriptions with our customers are typically one year in duration but can range from monthly to multi-year. In order for us to maintain or improve our results of operations, it is important that our customers renew their subscriptions with us on the same or more favorable terms. We cannot accurately predict renewal or expansion rates given the diversity of our customer base, in terms of size, industry, and geography. Our renewal and expansion rates may decline or fluctuate as a result of a number of factors, including customer spending levels, customer dissatisfaction with our products and services, decreases in the number of users at our customers, changes in the type and size of our customers, pricing changes, competitive conditions, the acquisition of our customers by other companies, and general economic conditions. If our customers do not renew their subscriptions with us, or if they reduce their subscription amounts at the time of renewal, our revenue and other results of operations will decline and our business will suffer. If our renewal or expansion rates fall significantly below the expectations of the public market, securities analysts, or investors, the trading price of our common stock would likely decline.

 We derive a significant majority of our revenue from a single product.

 Sales of subscriptions to our incident management offerings account for a significant majority of our revenue. We expect these subscriptions to continue to account for a large portion of our revenue for the foreseeable future. As a result, our operating results could suffer due to:

 • any decline in demand for our incident management product;
 • the failure of our broader platform and other products to achieve market acceptance;
 • the market for our digital operations platform not continuing to grow, or growing more slowly than we expect;
 • the introduction of products and technologies that serve as a replacement or substitute for, or represent an improvement over, our platform and products;
 • technological innovations or new standards that our platform and products do not address;
 • sensitivity to current or future prices offered by us or our competitors; and
 • our inability to release enhanced versions of our platform and products on a timely basis.

 Our inability to renew or increase sales of subscriptions to our platform or market and sell additional products and functionality, or a decline in prices of our platform subscription levels, would harm our business and operating results more seriously than if we derived significant revenue from a variety of products. In addition, if the market for our platform and products grows more slowly than anticipated, or if demand for our digital operations platform does not grow as quickly as anticipated, whether as a result of competition, pricing sensitivities, product obsolescence, technological change, unfavorable economic conditions, uncertain geopolitical environment, budgetary constraints of our customers, or other factors, our business, results of operations, and financial condition would be adversely affected.

 The markets in which we participate are competitive, and if we do not compete effectively, our operating results could be harmed.

 The market for digital operations solutions, particularly enterprise-grade solutions, is highly fragmented, competitive, and constantly evolving. We face substantial competition from in-house solutions, open-source software, manual processes, and software providers that may compete against certain components of our offering, as well as established and emerging software providers. With the introduction of emerging AI technologies such as generative AI and agentic AI ("Emerging AI Technologies"), and new market entrants, we expect that the competitive environment will remain intense going forward. For example, our competitors may more successfully incorporate Emerging AI Technologies into their products, gain or leverage superior access to certain technologies, or achieve higher market acceptance of their Emerging AI Technologies solutions. Some of our actual and potential competitors have been acquired by other larger enterprises and have made or may make acquisitions or may enter into partnerships or other strategic relationships that may provide more comprehensive offerings than they individually had offered or achieve greater economies of scale than we have. For example, some companies that compete with certain components of our offerings include ServiceNow, Atlassian, and Splunk (acquired by Cisco). In addition, new entrants not currently considered to be competitors may enter the space through product development, acquisitions, partnerships, or strategic relationships. As we look to market and sell our platform to potential customers with existing internal solutions, we must convince their internal stakeholders that our platform is superior to their current solutions.

 We compete on the basis of a number of factors, including:

 • platform functionality and breadth of offering;
 • integrations;
 • performance, security, scalability, and reliability;
 • real-time response, workflow, and automation capabilities;
 • focus on modern, contemporary digital services and operations;
 • brand recognition, reputation, and customer satisfaction;
 • ease of implementation and ease of use; and
 • time-to-value, total cost of ownership, and return on investment.

 Our competitors vary in size and in the breadth and scope of the products and services offered. Many of our competitors and potential competitors have greater name recognition, longer operating histories, more established customer relationships and installed customer bases, larger marketing budgets, and greater resources than we do. Further, other potential competitors not currently offering competitive solutions may expand their product offerings to compete with our platform, or our current and potential competitors may establish cooperative relationships among themselves or with third parties that may further enhance their resources and product and services offerings in our addressable market. Our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, and customer requirements. An existing competitor or new entrant could introduce new technology that reduces demand for our platform. In addition to product and technology competition, we face pricing competition. Some of our competitors offer their solutions at a lower price than our solutions, which has resulted in pricing pressures. Some of our larger competitors, such as ServiceNow, Atlassian, and Splunk, have the operating flexibility to bundle competing solutions with other offerings, including offering them at a lower price or for no additional cost to customers as part of a larger sale of other products.

 In addition, because of the characteristics of open-source software, there may be fewer technology barriers to entry in the open-source market by new competitors. One of the characteristics of open-source software is that, subject to specified restrictions, anyone may modify and redistribute the existing open-source software and use it to compete in the marketplace. Such competition can develop with a smaller degree of overhead and lead time than required by traditional proprietary software companies. New open-source-based platform technologies and standards are consistently being developed and can gain popularity quickly. Improvements in open source could cause customers to replace software purchased from us with their internally-developed, integrated, and maintained open-source software. It is possible for competitors with greater resources than ours to develop their own in-house solution and make it available on an open-source basis to organizations that would otherwise be potential customers of ours, potentially reducing the demand for our products and putting price pressure on our offerings.

 For all of these reasons, we may not be able to compete successfully against our current or future competitors, and this competition could result in the failure of our platform to continue to achieve or maintain market acceptance, any of which would harm our business, results of operations, and financial condition.

 The nature of our business exposes us to inherent liability risks.

 Our platform and related products,, including AIOps and Automation, are designed to provide quick, reliable alerts, to communicate information frequently during critical business events, such as information relevant to mitigating the damaging effects of system problems, and to automatically remediate systems problems. Due to the nature of such products, we are potentially exposed to greater risks of liability for solution or system failures than may be inherent in other businesses. Although substantially all of our subscription agreements contain provisions limiting our liability to our customers, we cannot assure you that these limitations will be enforced nor that the costs of any litigation related to actual or alleged omissions or failures would not have a material adverse effect on us even if we prevail.

 Further, certain of our insurance policies and the laws of some states may limit or prohibit insurance coverage for punitive or certain other types of damages or liability arising from gross negligence, and we cannot assure you that we are adequately insured against the risks that we face.

 We expect fluctuations in our financial results, making it difficult to project future results, and if we fail to meet the expectations of securities analysts or investors with respect to our operating results, our stock price and the value of your investment could decline.

 Our operating results have fluctuated in the past and are expected to fluctuate in the future due to a variety of factors, many of which are outside of our control. As a result, our past results may not be indicative of our future performance. In addition to the other risks described herein, factors that may affect our operating results include the following:

 • fluctuations in demand for or pricing of our platform due to customers reducing their expenditures, whether as a cost-cutting measure or a result of their insolvency or bankruptcy, and whether due to inflationary pressures, rising global interest rates, bank failures, or other reasons;
 • our ability to attract new customers;
 • our ability to retain our existing customers;
 • customer expansion rates;
 • the pricing and quantity of subscriptions renewed;
 • the timing of our customer purchases;
 • fluctuations or delays in purchasing decisions in anticipation of new products or product enhancements by us or our competitors;
 • changes in customers' budgets and in the timing of their budget cycles and purchasing decisions;
 • potential and existing customers choosing our competitors' products or developing their own solutions in-house;
 • our ability to control costs, including our operating expenses;
 • the amount and timing of payment for operating expenses, particularly research and development and sales and marketing expenses, including commissions;
 • the amount and timing of non-cash expenses, including stock-based compensation, goodwill impairments, and other non-cash charges;
 • the amount and timing of costs associated with recruiting, training, and integrating new employees and retaining and motivating existing employees;
 • the effects of acquisitions and their integration;
 • general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers participate;
 • the impact of new accounting pronouncements;
 • changes in the competitive dynamics of our market, including consolidation among competitors or customers;
 • significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our platform;
 • awareness of our brand and our reputation in our target markets; and
 • health epidemics or pandemics.

 Any of these and other factors, or the cumulative effect of some of these factors, may cause our results of operations to vary significantly. If our annual results of operations fall below the expectations of investors and securities analysts who follow our stock, the price of our common stock could decline substantially, and we could face costly lawsuits, including securities class action suits.

 Because we recognize revenue from the vast majority of our subscriptions over the term of the relevant agreement, downturns or upturns in sales are not immediately reflected in full in our operating results.

 We recognize revenue for our cloud-hosted software subscription fees over the term of our subscription agreement, and our subscriptions are typically one year in duration but can range from monthly to multi-year. As a result, much of our revenue is generated from cloud-hosted software subscriptions entered into during previous periods. Consequently, a decline in demand for our platform or a decline in new or renewed subscriptions in any one quarter may not significantly reduce our revenue for that quarter but could negatively affect our revenue in future quarters. Our revenue recognition model also makes it difficult for us to rapidly increase our revenue through the sale of additional cloud-hosted software subscriptions in any period, as revenue from customers is recognized over the applicable term of their cloud-hosted subscriptions.

 Seasonality may cause fluctuations in our sales and operating results.

 The first fiscal quarter of each year is usually our lowest billings and bookings quarter. Billings and bookings during our first fiscal quarter are typically lower than the prior fiscal fourth quarter. We believe that this results from the procurement, budgeting, and deployment cycles of many of our customers, particularly our enterprise customers. We expect that this seasonality will continue to affect our billings, bookings, and other operating results in the future as we continue to target larger enterprise customers.

 If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing customer needs, requirements, or preferences, our products may become less competitive.

 The market in which we compete is relatively new and subject to rapid technological change, evolving industry standards, and changing regulations, as well as changing customer needs, requirements, and preferences. The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis. In particular, advancements in technology such as AI and ML are changing the technology landscape, and businesses that are slow to adopt these new technologies may face a competitive disadvantage. If we were unable to continue enhancing and evolving our digital operations platform or delivering new products that keep pace with rapid technological and regulatory change, or if new technologies emerge that are able to deliver competitive value at lower prices, more efficiently, more conveniently, more reliably, or more securely than our products, our business, results of operations, and financial condition would be adversely affected.

 If we fail to maintain and enhance our brand, our ability to expand our customer base will be impaired and our business, results of operations, and financial condition may suffer.

 We believe that maintaining and enhancing the PagerDuty brand is important to support the marketing and sale of our existing and future products to new customers and expand sales of our platform to existing customers. We also believe that the importance of brand recognition will increase as competition in our market increases. Successfully maintaining and enhancing our brand will depend largely on the effectiveness of our marketing efforts, our ability to provide reliable products that continue to meet the needs of our customers at competitive prices, our ability to maintain our customers' trust, our ability to continue to develop new functionality and use cases, and our ability to successfully differentiate our platform and products from competitive products and services.

 Additionally, the performance of our partners may affect our brand and reputation if customers do not have a positive experience with our partners' services. Our brand promotion activities may not generate customer awareness or yield increased revenue, and even if they do, any increased revenue may not offset the expenses we incur in building our brand. Furthermore, third parties that potential customers rely on may provide misleading information about our offerings that could tarnish our brand. If we fail to successfully promote and maintain our brand, our business could suffer.

 Failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our products.

 Our ability to increase our customer base and achieve broader market acceptance of our digital operations platform will depend to a significant extent on our ability to expand our marketing and sales organizations. We plan to continue expanding our direct sales force and partners, both domestically and internationally. We also plan to continue dedicating significant resources to sales and marketing programs, including inbound marketing and online advertising. The effectiveness of these programs has varied over time and may vary in the future due to competition for key search terms, changes in search engine use, changes in the search algorithms used by major search engines and the European Union's General Data Protection Regulation ("EU GDPR"), the United Kingdom's GDPR ("U.K. GDPR") and other similar data privacy initiatives. All of these efforts have required and will require us to continue to invest significant financial and other resources. Our business and operating results will be harmed if our sales and marketing efforts do not generate significant increases in revenue. We may not achieve anticipated revenue growth from expanding our sales force if we are unable to hire, develop, integrate, and retain talented and effective sales personnel, if our new and existing sales personnel, on the whole, are unable to achieve desired productivity levels in a reasonable period of time, or if our sales and marketing programs are not effective.

 If we are unable to enhance and improve our platform or develop new functionality or use cases, our revenue may not grow.

 Our ability to increase sales will depend in large part on our ability to enhance and improve our platform, introduce new functionality in a timely manner, and develop new use cases for our platform. Any new functionality that we develop or acquire needs to be introduced in a timely and cost-effective manner in order to achieve the broad market acceptance necessary to generate significant revenue. If we are unable to enhance our platform or develop new functionality to keep pace with rapid technological and regulatory change, our business, results of operations, and financial condition could be adversely affected.

 If our products fail to perform properly due to defects or similar problems, and if we fail to develop enhancements to resolve any defect or other problems, we could lose customers, become subject to service performance or warranty claims, or incur other significant costs.

 Our operations are dependent upon our ability to prevent system interruption. Our platform for digital operations is built on a modern modular technology stack that is inherently complex and may contain material defects or errors, which may cause disruptions in availability or other performance problems. We have from time to time experienced service outages and found defects in our platform. We may experience additional outages or discover additional defects in the future that could result in data unavailability or unauthorized access to, or loss or corruption of, our customers' data. We may not be able to detect and correct defects or errors before implementing platform enhancements. Consequently, we or our customers may discover defects or errors after our platform has been deployed.

 The occurrence of any defects, errors, disruptions in service, or other performance problems with our software, whether in connection with day-to-day operations, upgrades, or otherwise, could result in:

 • loss of customers;
 • lost or delayed market acceptance and sales of our products;
 • delays in payment to us by customers;
 • injury to our reputation and brand;
 • legal claims, including warranty and service level agreement claims, against us; or
 • diversion of our resources, including through increased service and warranty expenses or financial concessions, and increased insurance costs.

 The costs incurred in correcting any material defects or errors in our software or other performance problems may be substantial and could adversely affect our business, operating results, and financial condition.

 As we continue to pursue sales to new and existing enterprise customers, our sales cycle, forecasting processes, and deployment processes may become more unpredictable and require greater time and expense.

 While we rely predominantly on self-service purchases to establish new customer relationships, our inside and field sales teams target expansion opportunities with existing mid-market and enterprise customers. Sales to new and existing mid-market and enterprise customers involve risks that may not be present to the same extent or at all with sales to smaller organizations. As we continue to focus on increasing our sales to mid-market and enterprise customers, we face more complex customer requirements, substantial upfront sales costs, less predictability, and, in some cases, longer sales cycles than we do with smaller customers. With mid-market and enterprise customers, the decision to subscribe to our platform frequently may require the approval of multiple management personnel and more technical personnel than would be typical of a smaller organization, and accordingly, sales to mid-market and enterprise customers may require us to invest more time educating these decision makers. Purchases by mid-market and larger enterprise customers are also frequently subject to budget constraints and unplanned administrative, processing, and other delays. Our ability to successfully sell our platform to mid-market and larger enterprise customers is also dependent upon the effectiveness of our sales force. For example, in the quarter ended October 31, 2024, several large enterprise deals were delayed due to extended procurement processes and sales cycles, which negatively impacted our results of operations. Our business increasingly depends on closing larger, more complex enterprise transactions with longer sales cycles, making our results more difficult to predict. Any shortfall in execution or delays in large deal closings could adversely impact our operating results in future periods. If we are unable to increase sales of our platform to mid-market and larger enterprise customers while mitigating the risks associated with serving such customers, our business, financial position, and operating results may be adversely affected.

 Unfavorable conditions in our industry or the global economy, or reductions in information technology spending, could limit our ability to grow our business and negatively affect our results of operations.

 Our results of operations may vary based on the impact of changes in our industry or the global economy on us or our customers and potential customers. Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations, heightened inflation and interest rates, bank failures, supply chain disruptions, labor shortages, exchange rate fluctuations, international trade relations, political turmoil, natural catastrophes, health epidemics or pandemics, geopolitical conflicts, and terrorist attacks on the United States, Europe, the Asia Pacific region, Japan, or elsewhere, could cause a decrease in business investments, including spending on information technology, and negatively affect the growth of our business. In particular, the United States has recently experienced historically high levels of inflation, which has increased and may continue to increase our supply, employee and facilities costs and may decrease demand for our products. Furthermore, our customers have in the past and may in the future be materially negatively impacted by these factors, which has in the past caused and may in the future cause them to reduce their budgets, decrease their spending due to capital constraints, or be unable to fulfill their payment obligations to us, and our business could be negatively impacted. Competitors, many of whom are larger and have greater financial resources than we do, have responded and may in the future respond to challenging market conditions by lowering prices, bundling offerings or providing more customer support in an attempt to attract our customers. In addition, the increased pace of consolidation amongst customers and potential customers, such as those with established IT functions that render our products less relevant, may result in reduced overall spending on our products. We cannot predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally or within any particular industry or how any such event may impact our business.

 Issues relating to the responsible use of our technologies, including AI in our offerings, may result in reputational and/or financial harm and liability.

 We are increasingly building AI capabilities into many of our products and services, including through the launch of PagerDuty Advance and AIOps. Concerns relating to the responsible use of new and evolving technologies, such as Emerging AI Technologies, in our offerings may result in reputational and/or financial harm and liability and may cause us to incur costs to resolve such issues. For example, Emerging AI Technologies may be insufficient, biased, inaccurate, or of poor quality, which could result in customer legal allegations for outcomes of our products, rejection or skepticism of our products, affect our reputation and brand, and negatively affect our financial results. Furthermore, Emerging AI Technologies pose emerging legal, social, and ethical issues and present risks and challenges that could affect its adoption, and therefore our business. If our offerings draw controversy due to their perceived or actual impact on society, such as Emerging AI Technologies solutions that have unintended consequences or are controversial because of their impact on critical infrastructure, human rights, privacy, employment, or other social, economic, or political issues, or if we are unable to develop and implement effective internal policies and frameworks relating to the responsible development and use of AI models and systems, we may experience brand, reputational, and/or competitive harm, or could face legal liability. Complying with multiple regulations from different jurisdictions related to AI could increase our cost of doing business, may change the way that we operate in certain jurisdictions, or may impede our ability to offer certain products and services in certain jurisdictions if we are unable to comply with regulations. Our failure to address concerns and regulation relating to the responsible use of AI could slow adoption of both Emerging AI Technologies and traditional AI in our products and services or cause reputational and/or financial harm.

 If we cannot maintain our company culture as we grow, our success and our business may be harmed.

 We believe our culture has been a key contributor to our success to date and that the critical nature of the platform that we provide promotes a sense of greater purpose in our employees. Failure to preserve our culture negatively affects our ability to retain and recruit personnel, which is critical to our growth, and to effectively focus on and pursue our corporate objectives. As we continue to grow, we may find it difficult to attract and retain high-performing top talent if we do not maintain a culture that is reflective of our talent. Thus, our company culture is a business imperative and critical to our competitive position within our industry. If we fail to maintain our company culture, our business and competitive position may be adversely affected.

 If we lose key members of our management team or are unable to attract and retain executives and employees we need to support our operations and growth, our business may be harmed.

 Our success and future growth depend upon the continued services of our management team and other key employees. From time to time, there may be changes in our management team resulting from the hiring or departure of executives and key employees, which could disrupt our business. Our senior management and key employees are employed on an at-will basis. We currently do not have "key person" insurance on any of our employees. Certain of our key employees have been with us for a long period of time and have fully vested stock options or other long-term equity incentives that may become valuable and may be sold in the public markets, generating significant proceeds, which may reduce their motivation to continue to work for us. The loss of one or more of our senior management, particularly Jennifer Tejada, our Chief Executive Officer, or other key employees could harm our business, and we may not be able to find adequate replacements. We cannot ensure that we will be able to retain the services of any members of our senior management or other key employees, and we cannot ensure that we would be able to timely replace members of our senior management or other key employees should any of them depart.

 The failure to attract and retain additional qualified personnel and any restrictions on the movement of personnel could prevent us from executing our business strategy and growth plans.

 To execute our business strategy, we must attract and retain highly qualified personnel. Competition for executive officers, software developers, sales personnel, and other key employees in our industry is intense and increasing. In particular, we compete with many other companies for software developers with high levels of experience in designing, developing, and managing cloud-based software, as well as for skilled sales and operations professionals. While the market for such personnel is particularly competitive in Silicon Valley, it is also competitive in other regions where we maintain operations, including Canada and Portugal. In addition, the current regulatory environment related to immigration is uncertain, including with respect to the availability of H1-B and other U.S. visas. If a new or revised U.S. visa program is implemented, it may impact our ability to recruit, hire, retain, or effectively collaborate with qualified skilled personnel, including in Canada, which could adversely impact our business, operating results, and financial condition. Our ability to achieve significant revenue growth in the future will depend, in part, on our ability to recruit, train, and retain a sufficient number of experienced sales professionals, particularly those with experience selling to enterprises. In addition, even if we are successful in hiring qualified sales employees, new hires require significant training and experience before they achieve full productivity, particularly for sales efforts targeted at enterprises and new territories. Our recent hires and planned hires may not become as productive as quickly as we expect, and we may be unable to hire or retain sufficient numbers of qualified individuals in the future in the geographies where we do business. Many of the companies with which we compete for experienced personnel have greater resources than we do and can frequently offer such personnel substantially greater compensation than we can offer. In addition, we may fail to identify, attract, and retain talented employees who support our corporate culture that we believe fosters innovation, teamwork, diversity, and inclusion, and which we believe is critical to our success. If we fail to identify, attract, develop, and integrate new personnel, or fail to retain and motivate our current personnel, our growth prospects would be severely harmed.

 The estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all.

 Market opportunity estimates and growth forecasts, including those we have generated ourselves, are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The variables that go into the calculation of our market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of addressable users or companies covered by our market opportunity estimates will purchase our products at all or generate any particular level of revenue for us. Any expansion in our market depends on a number of factors, including the cost, performance, and perceived value associated with our platform and those of our competitors. Even if the market in which we compete meets the size estimates and growth forecasted, our business could fail to grow at similar rates, if at all. Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties. Accordingly, the forecasts of market growth should not be taken as indicative of our future growth potential.

 If our information technology systems or those of third parties with whom we work or our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including, but not limited to, significant costs, litigation and regulatory investigations and actions, harm to our reputation, loss of revenue or profits, loss of customers, and other adverse consequences

 In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, "processing") of personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, sensitive third-party data, business plans, transactions, and financial information (collectively, "sensitive data"), including sensitive data of our customers and their respective employees.

 Cyber-attacks, malicious internet-based or insider activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our or our customers' sensitive data and information technology systems, and those of the third parties with whom we work. Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer "hackers," threat actors, "hacktivists," organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation state- actors. Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.

 We and the third parties with whom we work have experienced and will continue to experience cyber-attacks and other incidents, and are exposed to threats, that have resulted and could in the future result in, adverse consequences to our business including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences. We and the third-parties with whom we work have been and may continue to be subject to a variety of attacks and threats including but not limited to malware (including as a result of advanced persistent threat intrusions), social engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), ransomware attacks (which are becoming increasingly severe and prevalent), denial-of-service attacks, credential stuffing attacks, credential harvesting, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, personnel misconduct or error, malicious code (such as viruses or worms), loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats. In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments. Furthermore, we may be unable to anticipate, detect, or prevent techniques used to obtain unauthorized access to or to sabotage our systems, or those of third parties with whom we work, because such techniques change frequently and are increasing in their sophistication.

 During times of war and other major conflicts, we (and the third parties with whom we work) may be vulnerable to a heightened risk of cybersecurity threats, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our services.

 Remote work has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit, and in public locations. Furthermore, future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities' systems and technologies. Additionally, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.

 In addition, our reliance on third parties could introduce new cybersecurity risks and vulnerabilities, including supply-chain attacks, and other threats to our business operations. We rely on third parties to operate critical business systems to process sensitive data in a variety of contexts, including, without limitation, encryption and authentication technology, employee email, cloud-based infrastructure, data center facilities, content delivery to customers, and other functions. We also rely on third parties to provide other products, services, parts, or otherwise to operate our business. Our ability to monitor these third parties' information security practices is limited, and these third parties may not have adequate information security measures in place. When the third parties with whom we work experience a security incident or other interruption, we could experience adverse consequences.

 While we may be entitled to damages if the third parties with whom we work fail to satisfy their data privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award. In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties' infrastructure in our supply chain or that of the third parties with whom we work have not been compromised.
 While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective. We take steps to detect, mitigate, and remediate vulnerabilities, in our information systems (such as hardware and/or software, including that of third parties with whom we work), but we may not be able to detect and remediate all such vulnerabilities including on a timely basis.

 Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities. Even if we have issued or otherwise made available patches or information for vulnerabilities in our software applications, products or services, our customers may be unwilling or unable to deploy such patches and use such information effectively and in a timely manner for measures that require customer action. Vulnerabilities could be exploited and result in a security incident.

 As our platform operates in a multi-tenant environment, there is a risk that sensitive customer data could be improperly accessed, disclosed, or leaked to unauthorized parties due to security vulnerabilities, configuration errors, or other operational factors.

 Any of the previously identified or similar threats could cause a security incident, production downtime, or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our or our customers' sensitive data or our information technology systems, or those of the third parties with whom we work. A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our services.

 We may expend significant resources or modify our business activities to try to protect against incidents. Additionally, certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data.
 In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.

 The reliability and availability of our service is critical to our success. However, software such as ours can contain errors, defects, security vulnerabilities, or software bugs that are difficult to detect and correct, particularly when such vulnerabilities are first introduced or when new versions or enhancements of our service are released. Additionally, even if we are able to develop a patch or other fix to address such vulnerabilities, such a fix may be difficult to push out to our customer-facing services or otherwise be delayed. Additionally, our business depends upon the appropriate and successful implementation of our service by our customers. If our customers fail to use our service according to our specifications, our customers may suffer a security incident on their own systems or other adverse consequences. Even if such an incident is unrelated to our security practices, it could result in our incurring significant economic and operational costs in investigating, remediating, and implementing additional measures to further protect our customers from their own vulnerabilities, and could result in reputational harm.

 Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents., or to implement other requirements, such as providing credit monitoring. Such disclosures and related actions are costly, and the disclosure or the failure to comply with such applicable requirements could lead to adverse consequences.

 Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations. While we maintain general liability insurance coverage and coverage for errors or omissions, we cannot assure you that such coverage would be adequate or would otherwise protect us from liabilities or damages with respect to claims alleging compromises of customer data, that such coverage will continue to be available to us on acceptable terms or at all, or that such coverage will pay future claims. The successful assertion of one or more large claims against us that exceeds our available insurance coverage, or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), could have an adverse effect on our business.

 If we (or a third party with whom we work) experience a security incident or are perceived to have experienced a security incident, we may experience material adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive data (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms. Security incidents and material attendant consequences may prevent or cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business. In particular, our product and service offering specifically involves protecting the information or systems of our customers, and a security incident could heighten the impact of these material adverse consequences because of the nature of our business and expectations of our customers.

 Additionally, our sensitive data or those of our customers could be leaked, disclosed, or revealed as a result of or in connection with our employee's, personnel's, or vendor's use of generative AI technologies. Sensitive data (including confidential, competitive, proprietary, or personal data) that is inputted into a generative AI/machine learning platform or otherwise made available to developers of generative AI/machine learning platforms could be leaked or disclosed to others if it is used to train a third party AI/machine learning model. Additionally, where an AI/machine learning model ingests personal data and makes connections using such data, those technologies may reveal other personal or sensitive data generated by the model.

 We rely upon free trials of our products and other inbound lead-generation strategies to drive our sales and revenue. If these strategies fail to continue to generate sales opportunities or trial users do not convert into paying customers, our business and results of operations would be harmed.

 We rely upon our marketing strategy of offering a 14-day free trial and "freemium" plan, a free version of PagerDuty and an open source version of Rundeck Automation as well as other inbound, lead-generation strategies to generate new sales opportunities. Most of our customers start with the free version of our products. These strategies may not be successful in continuing to generate sufficient sales opportunities necessary to increase our revenue. A subset of users never converts from the trial or free version of a product to a paid version of such product. Further, we often depend on individuals within an organization who initiate the trial or free versions of our products being able to convince decision makers within their organization to convert to a paid version. To the extent that these users do not become, or are unable to convince others to become, paying customers, we will not realize the intended benefits of this marketing strategy, and our ability to grow our revenue will be adversely affected.

 Interruptions or delays in performance of our service could result in customer dissatisfaction, damage to our reputation, loss of customers, limited growth, and reduction in revenue.

 We currently serve our customers using third-party cloud providers, including those operated by AWS. Our customers need to be able to access our platforms at any time, without interruption or degradation of performance. In some cases, third-party cloud providers run their own platforms that we access, and we are, therefore, vulnerable to their service interruptions. We therefore depend on our third-party cloud providers' ability to protect their data centers against damage or interruption from natural disasters, power or telecommunications failures, criminal acts, and similar events. In the event that our data center arrangements are terminated, or if there are any lapses of service or damage to a data center, we could experience lengthy interruptions in our service as well as delays and additional expenses in arranging new facilities and services. Even with current and planned disaster recovery arrangements, including the existence of redundant data centers that become active during certain lapses of service or damage at a primary data center, our reputation and business could be harmed.

 Design and mechanical errors, spikes in usage volume, and failure to follow system protocols and procedures could cause our IT systems and infrastructure to fail, resulting in interruptions in our digital operations platform. We have from time to time in the past experienced service disruptions, and we cannot assure you that we will not experience interruptions or delays in our service in the future. Any interruptions or delays in our service or damage to our products, whether caused by modification or upgrades, third parties, terrorist attacks, state-sponsored attacks, geopolitical tensions or armed conflicts, export controls and sanctions, natural disasters, the effect of climate change (such as drought, flooding, wildfires and resultant air quality effects and related preventative power shutdowns, increased storm severity, and sea level rise), power loss, utility outages, telecommunication failures, computer viruses, supply-chain attacks, computer denial of service attacks, phishing schemes, security breaches, or other attempts to harm or access our system, could harm our relationships with customers and cause our revenue to decrease or our expenses to increase. Also, in the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur. These factors in turn could further reduce our revenue, subject us to liability, and cause us to issue credits or cause customers to fail to renew their subscriptions, any of which could adversely affect our business.

 If we do not or cannot maintain the compatibility of our platform with third-party applications that our customers use in their businesses, our revenue and growth prospects will decline.

 The functionality and popularity of our platform depend, in part, on our ability to integrate our platform with third-party applications, tools, and software. These third- parties may change the features of their technologies, restrict our access to their applications, tools, or other software or alter the terms governing their use in a manner that is adverse to our business and our ability to market and sell our digital operations platform. Such third parties could also develop features and functionality that limit or prevent our ability to use these third-party technologies in conjunction with our platform, which would negatively affect adoption of our platform and harm our business. If we fail to integrate our platform with third-party applications, tools, or other software that our customers use, use publicly available APIs for our integrations, or expose APIs for our customers to use, we may not be able to offer the functionality that our customers require, which would negatively affect our results of operations and growth prospects.

 Further, we are subject to requirements imposed by mobile application stores such as those operated by Apple and Google, who may change their technical requirements or policies in a manner that adversely impacts the way in which we or our partners collect, use, and share data from users. Similarly, new technical requirements and policies that our partners put in place or are subject to could impact our ability to operate as expected in certain jurisdictions. If we do not comply with these requirements, we could lose access to the application store and users, and our business would be harmed.

 The success of our business depends on our customers' continued and unimpeded internet access.

 Our customers must have internet access in order to use our platform. Some internet service providers may take measures that affect their customers' ability to use our platform, such as degrading the quality of the data packets we transmit over their lines, giving those packets lower priority, giving other packets higher priority than ours, blocking our packets entirely, or attempting to charge their customers more for using our platform.

 In January 2018, the Federal Communications Commission (the "FCC") repealed "network neutrality" rules, which barred internet service providers from blocking or slowing down access to online content, protecting services like ours from such interference. The 2018 decision was largely affirmed by the U.S. Court of Appeals for the District of Columbia Circuit, subject to a remand to consider several issues raised by parties that supported network neutrality, and in November 2020 the FCC affirmed its decision to repeal the rules. The FCC again adopted net neutrality rules on May 7, 2024 and the new rules bar internet service providers from blocking or throttling content and prohibit requiring content providers to pay for preferential access to users, a practice known as paid prioritization. These rules were stayed by the U.S. Court of Appeals for the Sixth Circuit on July 12, 2024, and on January 2, 2025, the court issued a decision overturning the rules, based on a conclusion that, under the federal Communications Act, broadband internet access service is an information service, not a common carrier service. This decision has the effect of reinstating the 2018 order. We cannot predict whether this decision will be appealed to the Supreme Court or any action the Supreme Court might take if an appeal is filed, or the impact of the 6th Circuit decision or any further appeal on our operations or business.

 In addition, certain states have adopted or are adopting or considering legislation or executive actions that would regulate the conduct of broadband providers. California's state-specific network neutrality law has taken effect, and Vermont's law took effect, but a challenge to that law remains pending. We cannot predict whether the state initiatives will be enforced, modified, overturned, or vacated by legal action of the court, federal legislation, or the FCC.

 To the extent internet service providers, absent network neutrality rules, attempt to interfere with our services, extract fees from us to make our platform available, or otherwise engage in discriminatory practices, our business could be adversely impacted. Within such a regulatory environment, we could experience discriminatory or anti-competitive practices that could impede our domestic and international growth, cause us to incur additional expense, or otherwise negatively affect our business. At the same time, re-adoption of network neutrality rules could affect the services used by us and our customers by restricting the offerings made by internet service providers or reducing their incentives to invest in their networks. Such actions could limit or reduce the quality of internet access services and have an adverse impact on the quality of the services we provide to our customers.

 We provide service-level commitments under our cloud-hosted subscription agreements. If we fail to meet these contractual commitments, we could be obligated to provide credits for future service or face subscription termination with refunds of prepaid amounts, which would lower our revenue and harm our business, results of operations, and financial condition.

 All of our cloud-hosted subscription agreements contain service-level commitments. If we are unable to meet the stated service-level commitments, including our failure to meet the uptime and delivery requirements under these customer subscription agreements, we may be contractually obligated to provide these customers with service credits which could significantly affect our revenue in the periods in which the uptime or delivery failure occurs or when the credits are applied. We could also face subscription terminations, which could significantly affect both our current and future revenue. Any service-level failures could also damage our reputation, which could also adversely affect our business and results of operations.

 If we fail to offer high-quality support, our business and reputation could suffer.

 Our customers rely on our customer support personnel to resolve issues and realize the full benefits that our platform provides. High-quality support is also important for the renewal and expansion of our subscriptions with existing customers. The importance of our support function will increase as we expand our business and pursue new customers. If we do not help our customers quickly resolve issues and provide effective ongoing support, our ability to maintain and expand our subscriptions to existing and new customers could suffer, and our reputation with existing or potential customers would be harmed.

 We may not be able to scale our business quickly enough to meet our customers' growing needs, and if we are not able to grow efficiently, our operating results could be harmed.

 As usage of our digital operations platform grows and as the breadth of the use cases for our products expands, we will need to devote additional resources to improving and maintaining our infrastructure and integrating with third-party applications. In addition, we will need to appropriately scale our internal business systems and our services organization, including customer support and professional services, to serve our growing customer base.

 Any failure of or delay in these efforts could result in impaired system performance and reduced customer satisfaction, resulting in decreased sales to new customers, lower subscription renewal rates by existing customers, the issuance of service credits, or requested refunds, which would hurt our revenue growth and our reputation. Even if we are successful in these efforts, they will be expensive and complex, and require the dedication of significant management time and attention. We could also face inefficiencies or service disruptions as a result of our efforts to scale our internal infrastructure. We cannot be sure that the expansion and improvements to our internal infrastructure will be effectively implemented on a timely basis, if at all, and such failures would adversely affect our business, results of operations, and financial condition.

 Our current operations are international in scope, and we plan further geographic expansion, creating a variety of operational challenges.

 A component of our growth strategy involves the further expansion of our operations and customer base internationally. In each of the fiscal years ended January 31, 2025, 2024, and 2023 customers outside of the United States generated 28%, 28%, and 24%, respectively, of our revenue. We currently have offices in Australia, Canada, Chile, Japan, Portugal, the United Kingdom ("UK"), and the United States. We are continuing to adapt to and develop strategies to address international markets, but there is no guarantee that such efforts will have the desired effect. As of January 31, 2025, approximately 45% of our full-time employees were located outside of the United States. We expect that our international activities will continue to grow for the foreseeable future as we continue to pursue opportunities in existing and new international markets, which will require significant dedication of management attention and financial resources.

 Our current and future international business and operations involve a variety of risks, including:

 • recession or economic downturn globally or in the jurisdictions in which we do business;
 • inflation, as well as changes in existing and expected rates of inflation, which may vary across the jurisdictions in which we do business;
 • changes in a specific country's or region's political or economic conditions;
 • health epidemics or pandemics, influenza and other highly communicable diseases or viruses;
 • continuing uncertainty regarding social, political, immigration, and tax and trade policies in the U.S. and abroad, including as a result of the United Kingdom's withdrawal from the European Union ("EU");
 • the need to adapt and localize our products for specific countries;
 • greater difficulty collecting accounts receivable and longer payment cycles;
 • potential changes in trade relations, regulations, or laws;
 • unexpected changes in laws, regulatory requirements, or tax laws;
 • more stringent regulations relating to data privacy and security and the unauthorized use of, or access to, commercial and personal information, particularly in Europe;
 • differing and potentially more onerous labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations;
 • challenges inherent in efficiently managing, and the increased costs associated with, an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits, and compliance programs that are specific to each jurisdiction;
 • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems;
 • increased travel, real estate, infrastructure, and legal compliance costs associated with international operations;
 • currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions if we choose to do so in the future;
 • limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries;
 • laws and business practices favoring local competitors or general market preferences for local vendors;
 • limited or insufficient intellectual property protection or difficulties enforcing our intellectual property;
 • political instability, including military actions;
 • terrorist activities;
 • exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act, or FCPA, U.S. bribery laws, the UK Bribery Act, and similar laws and regulations in other jurisdictions; and
 • adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.

 Political actions, including trade protection and national security policies of U.S. and foreign government bodies, such as tariffs, import or export regulations, trade and economic sanctions, quotas, or other trade barriers and restrictions could affect our ability to fulfill our contractual obligations and have a material adverse effect on our business. Further, due to political uncertainty and military actions such as Russia's invasion of Ukraine or the conflict in Israel, Syria, and the surrounding areas, we and the third parties upon which we rely may be vulnerable to a heightened risk of security incidents, computer malware, social-engineering attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of sensitive data or other information technology assets, and other cyber-attacks, including attacks that could materially disrupt our systems and operations, supply chain, and ability to do business.

 If any of the above risks materializes, it could harm our business and prospects. In addition, our limited experience in operating our business internationally increases the risk that any potential future expansion efforts that we may undertake will not be successful. If we invest substantial time and resources to further expand our international operations and are unable to do so successfully and in a timely manner, our business and operating results will suffer.

 Our international operations may subject us to potential adverse tax consequences.

 We are continuing to expand our international operations to better support our growth into international markets. Our corporate structure and associated transfer pricing policies contemplate future growth in international markets, and consider the functions, risks, and assets of the various entities involved in intercompany transactions. The amount of taxes we pay in different jurisdictions may depend on the application of the tax laws of the various jurisdictions, including the United States, to our international business activities, changes in tax rates, new or revised tax laws or interpretations of existing tax laws and policies, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions pursuant to our intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions. If such a challenge or disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest, and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our operations. Our financial statements could fail to reflect adequate reserves to cover such a contingency.

 We are exposed to fluctuations in currency exchange rates, which could negatively affect our operating results.

 Our sales contracts are primarily denominated in U.S. dollars, and therefore, substantially all of our revenue is not subject to foreign currency risk. However, a strengthening of the U.S. dollar could increase the real cost of our platform to our customers outside of the United States, which could adversely affect our operating results. In addition, an increasing portion of our operating expenses are incurred and an increasing portion of our assets are held outside the United States. These operating expenses and assets are denominated in foreign currencies and are subject to fluctuations due to changes in foreign currency exchange rates. If we are not able to successfully hedge against the risks associated with currency fluctuations, our operating results could be adversely affected.

 Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.

 As of January 31, 2025, we had federal net operating loss ("NOL") carryforwards as reported on the tax return in the amount of $404.2 million. Beginning in 2037, $5.3 million of the federal NOLs will begin to expire. The remaining $398.9 million will carry forward indefinitely. As of January 31, 2025, we had state and foreign net operating loss carryforwards as reported on the tax return in the amount of $29.2 million and $6.5 million, respectively, which begin to expire in 2028 and 2033, respectively. In general, under Section 382 of the United States Internal Revenue Code of 1986, as amended (the "Code"), a corporation that undergoes an "ownership change" is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income. If we undergo an ownership change, our ability to utilize NOLs could be limited by Section 382 of the Code. Future changes in our stock ownership, many of which are outside of our control, could result in an ownership change under Section 382 of the Code. Furthermore, our ability to utilize NOLs of companies that we have acquired or may acquire in the future may be subject to limitations. Under current U.S. tax law, federal NOL carryforwards generated in tax years ending on or prior to December 31, 2017 are only permitted to be carried forward for 20 years. Federal NOL carryforwards generated in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOLs is limited to 80% of taxable income. It is uncertain if and to what extent various states have imposed or will impose similar limitations on the use of NOLs. For these reasons, we may not be able to utilize a material portion of the NOLs prior to expiration, even if we were to achieve profitability, which may adversely affect our results of operations.

 Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition, or results of operations.

 New tax laws, statutes, rules, regulations, or ordinances could be enacted at any time. Further, existing tax laws, statutes, rules, regulations, or ordinances could be interpreted differently, changed, repealed, or modified at any time. Any such enactment, interpretation, change, repeal, or modification could adversely affect us, possibly with retroactive effect. For instance, the Inflation Reduction Act, or IRA, imposes, among other rules, a 15% minimum tax on the book income of certain large corporations and a 1% excise tax on certain corporate stock repurchases. The Tax Cuts and Jobs Act of 2017, or TCJA, as amended by the Coronavirus Aid, Relief, and Economic Security Act significantly reformed the Code by lowering U.S. federal corporate income tax rates, changing the utilization of future net operating loss carryforwards, permitting for the expensing of certain capital expenditures, eliminating the option to currently deduct research and development expenditures and requiring taxpayers to capitalize and amortize U.S.-based and non-U.S.-based research and development expenditures over five and fifteen years, respectively, and putting into effect significant changes to U.S. taxation of international business activities. The IRA, TCJA, or any future tax reform legislation could have a material impact on the value of our deferred tax assets, result in significant one-time charges, and increase our future tax expenses.

 If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected.

 The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates." The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant estimates and judgments involve stock-based compensation expense, the fair value of the employee stock purchase plan (the "ESPP") expense, period of benefit for amortizing deferred contract costs, the determination of the allowance for credit losses, and the provision for income taxes, including related valuation allowance and uncertain tax positions, among others. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our common stock.

 We may not be able to successfully manage the growth of our business if we are unable to continue improving our internal systems, processes, and controls.

 We need to continue improving our internal systems, processes, and controls to effectively manage our operations and growth. We may not be able to successfully implement and scale improvements to our systems and processes in a timely or efficient manner or in a manner that does not negatively affect our operating results. In addition, our systems and processes may not prevent or detect all errors, omissions, or fraud. We may experience difficulties in managing improvements to our systems, processes, and controls in connection with the implementation of third-party software or otherwise, which could impair our ability to provide products to our customers in a timely manner, limit us to smaller deployments of our products, increase our technical support costs, or cause us to be unable to timely and accurately report our financial results in accordance with the rules and regulations of the SEC.

 In addition, we rely on hardware and infrastructure purchased or leased from third parties and software licensed from third parties to operate critical business functions. Our business would be disrupted if any of this third-party hardware, software, and infrastructure becomes unavailable on commercially reasonable terms, or at all. Furthermore, any errors or defects in third-party hardware, software, or infrastructure, or delays or complications with respect to the transition of critical business functions from one third-party product to another, could result in errors or a failure of our platform, which could harm our business and results of operations.

 We could incur substantial costs in protecting or defending our proprietary rights, and any failure to adequately protect such rights could impair our competitive position and result in the loss of valuable intellectual property rights, reduced revenue and costly litigation.

 Our success is dependent, in part, upon protecting our proprietary technology. We rely on a combination of patents, copyrights, trademarks, service marks, trade secret laws, and contractual provisions in an effort to establish and protect our proprietary rights. However, the steps we take to protect our intellectual property may be inadequate. While we have been issued patents in the United States and have additional patent applications pending, we may be unable to obtain patent protection for the technology covered in our pending patent applications. In addition, any patents that are issued may not provide us with competitive advantages or may be successfully challenged by third parties. Any of our patents, trademarks, or other intellectual property rights may be challenged or circumvented by others or invalidated through administrative process or litigation. There can be no assurance that others will not independently develop similar products, duplicate any of our products, design around our patents, or use or even register our trademarks in various jurisdictions. Furthermore, legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights are uncertain. Despite our precautions, it may be possible for unauthorized third parties to copy our products and use information that we regard as proprietary to create products and services that compete with ours. Some license provisions protecting against unauthorized use, copying, transfer, and disclosure of our products may be unenforceable under the laws of jurisdictions outside the United States. In addition, certain countries into which we might expand our business might require us, as examples, to do business through an entity that is partially owned by a local investor, to make available our technologies to state regulators, or to grant license rights to local partners in a manner not required by the jurisdictions in which we currently operate. As we expand our international activities, our exposure to reverse engineering of our technologies and unauthorized copying and use of our products and proprietary information, as well as unauthorized use of our trademarks, may increase.

 We enter into confidentiality and invention assignment agreements with our employees and consultants and enter into confidentiality agreements with the parties with whom we have strategic relationships and business alliances. No assurance can be given that these agreements will be effective in controlling access to and distribution of our products and proprietary information or in avoiding misuse of proprietary information or intellectual property. Further, these agreements do not prevent our competitors or partners from independently developing technologies that are substantially equivalent or superior to our platform.

 In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights. Litigation may be necessary in the future to enforce our intellectual property rights and to protect our trade secrets. Litigation brought to protect and enforce our intellectual property rights could be costly, time consuming, and distracting to management and could result in the impairment or loss of portions of our intellectual property. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights. Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management's attention and resources, could impair or delay additional sales, renewals or customer adoption of our platform, impair the functionality of our platform, delay introductions of new products, result in our substituting inferior or more costly technologies into our platform, or injure our reputation. We will not be able to protect our intellectual property if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property. Moreover, policing unauthorized use of our technologies, trade secrets, and intellectual property may be difficult, expensive, and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak. If we fail to meaningfully protect our intellectual property and proprietary rights, our business, operating results, and financial condition could be adversely affected.

 Any litigation or claims against us could be costly and time-consuming to defend.

 We have in the past and may in the future become subject to legal proceedings and claims that arise in the ordinary course of business, such as claims brought by our customers in connection with commercial disputes, employment claims made by our current or former employees or whistleblower and other litigation and claims. Such matters have in the past and may in the future be time-consuming, result in substantial costs, require us to change our business practices, and divert management's attention and resources, which might seriously harm our business, overall financial condition, and operating results., regardless of their merit. Insurance might not cover such claims, might not provide sufficient payments to cover all the costs to resolve one or more such claims, and might not continue to be available on terms acceptable to us. A claim brought against us that is uninsured or underinsured could result in unanticipated costs, thereby reducing our operating results and leading analysts or potential investors to reduce their expectations of our performance, which could reduce the trading price of our stock.

 We have in the past, and may in the future be, subject to intellectual property disputes, which are costly and may subject us to significant liability and increased costs of doing business.

 We have in the past and may in the future become subject to intellectual property disputes. Lawsuits are time-consuming and expensive to resolve, and they divert management's time and attention. Although we carry various insurance policies, our insurance may not cover potential claims of this type or may not be adequate to indemnify us for all liability that may be imposed. We cannot predict the outcome of lawsuits and cannot assure you that the results of any such actions will not have an adverse effect on our business, operating results, or financial condition.

 Our industry is characterized by the existence of a large number of patents, copyrights, trademarks, trade secrets, and other intellectual and proprietary rights. From time to time, we may be required to defend against litigation claims based on allegations of infringement or other violations of intellectual property rights. Our technologies may not be able to withstand any third-party claims against their use. In addition, many companies have the capability to dedicate substantially greater resources than we do to enforce their intellectual property rights and to defend claims that may be brought against them. Any litigation may also involve patent holding companies or other adverse patent owners that have no relevant product revenue, and therefore, our patents may provide little or no deterrence as we would not be able to assert them against such entities or individuals. If a third party is able to obtain an injunction preventing us from accessing third-party intellectual property rights, or if we cannot license or develop alternative technology for any aspect of our business found to be infringing, we would be forced to limit or stop sales of our software or cease business activities related to such intellectual property. Any inability to license third-party technology in the future would have an adverse effect on our business or operating results and would adversely affect our ability to compete. We may also be contractually obligated to indemnify our customers in the event of a finding of infringement of a third party's intellectual property rights. Responding to such claims, regardless of their merit, can be time consuming, costly to defend, and damaging to our reputation and brand.

 We use open-source software in our products, which could subject us to litigation or other actions.

 We use open-source software in our products. From time to time, there have been claims challenging the ownership of open-source software against companies that incorporate it into their products. As a result, we could be subject to lawsuits by parties claiming ownership of what we believe to be open-source software. Litigation could be costly for us to defend, have a negative effect on our operating results and financial condition, require us to devote additional research and development resources to change our products, result in customer legal allegations for impacts on their businesses, rejection or skepticism of our products, affect our reputation and brand, and negatively affect our financial results. In addition, although we employ open-source software license screening measures, if we were to combine our proprietary software products with open source software in a certain manner we could, under certain open-source licenses, be required to release the source code of our proprietary software products. If we inappropriately use or incorporate open-source software subject to certain types of open-source licenses that challenge the proprietary nature of our products, we may be required to re-engineer such products, discontinue the sale of such products, or take other remedial actions, each of which could reduce the value of our platform and technologies and materially and adversely affect our ability to sustain and grow our business.

 Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, data, and other losses.

 Our agreements with customers and other third parties may include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement (including for the use of Emerging AI Technologies), inadequate data privacy and security, damages caused by us to property or persons, or other liabilities relating to or arising from our platform or other contractual obligations. Some of these agreements provide for uncapped liability and some indemnity provisions survive termination or expiration of the applicable agreement. Large indemnity payments could harm our business, results of operations, and financial condition. Although we normally contractually limit our liability with respect to such obligations, we may still incur substantial liability, and we may be required to cease use of certain functions of our platform or products as a result of any such claims. Any dispute with a customer with respect to such obligations could have adverse effects on our relationship with that customer and other existing or new customers, harming our business and results of operations. In addition, although we carry various insurance policies, our insurance may not be adequate to cover our indemnification obligations or to indemnify us for all liability that may be imposed or otherwise protect us from liabilities or damages with respect to claims alleging intellectual property infringement (including through the use of Emerging AI Technologies) or compromises of customer data, and any such coverage may not continue to be available to us on acceptable terms or at all.

 We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business.

 We are subject to the FCPA, U.S. domestic bribery laws, the UK Bribery Act, and other anti-corruption and anti-money laundering laws in the countries in which we conduct activities. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies, their employees and their third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector. As we increase our international sales and business and sales to the public sector, we may engage with business partners and third-party intermediaries to market our services and to obtain necessary permits, licenses, and other regulatory approvals. In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities.

 While we have policies and procedures to address compliance with such laws, we cannot assure you that all of our employees and agents will not take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. As we increase our international sales and business, our risks under these laws may increase.

 Detecting, investigating, and resolving actual or alleged violations of anti-corruption laws can require a significant diversion of time, resources, and attention from senior management. In addition, noncompliance with anti-corruption, anti-bribery, or anti-money laundering laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, enforcement actions, fines, damages, other civil or criminal penalties or injunctions, suspension or debarment from contracting with certain persons, reputational harm, adverse media coverage, and other collateral consequences. If any subpoenas or investigations are launched, governmental or other sanctions are imposed, or we do not prevail in any possible civil or criminal proceeding, our business, results of operations, and financial condition could be materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management's attention and resources and significant defense costs and other professional fees.

 We and the third parties with whom we work are subject to stringent and evolving U.S. and foreign laws, regulations, rules, contractual obligations, industry standards, policies, and other obligations related to data privacy and security. Our actual or perceived failure to comply with such obligations (or such failure by the third parties with whom we work) could lead to regulatory investigations or actions; litigation (including class claims) and mass arbitration demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers; and other adverse business consequences.

 In the ordinary course of business, we process sensitive data (as defined above). Our data processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security.

 In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws). For example, numerous U.S. states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data. As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide our products and services. Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments. These state laws allow for statutory fines for noncompliance. For example, the California Consumer Privacy Act of 2018 ("CCPA") applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights. The CCPA provides for administrative fines of up to $7,500 per intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages.

 These developments may further complicate compliance efforts, and increase legal risk and compliance costs for us, the third parties with whom we work, and our customers. Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future.

 Outside the United States, an increasing number of laws, regulations, and industry standards may govern data privacy and security. For example, the European Union's General Data Protection Regulation ("EU GDPR"), the United Kingdom's GDPR ("UK GDPR"), and Canada's Personal Information Protection and Electronic Documents Act ("PIPEDA") and Canada's Anti-Spam Legislation ("CASL"), impose strict requirements for processing personal data.
 For example, under the EU and UK GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros under the EU GDPR, 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.

 Legislative proposals and present laws and regulations regulate the use of cookies and other tracking technologies, electronic communications, and marketing. For example, in the European Economic Area ("EEA") and the UK, regulators are increasingly focusing on compliance with requirements related to the targeted advertising ecosystem. It is anticipated that the ePrivacy Regulation and national implementing laws will replace the current national laws that implement the ePrivacy Directive that governs electronic communications. In the United States, the CCPA, for example, grants California residents the right to opt-out of a company's sharing of personal data for advertising purposes in exchange for money or other valuable consideration and requires covered businesses to honor user-enabled browser signals from the Global Privacy Control. Partially as a result of these developments, individuals are becoming increasingly resistant to the collection, use, and sharing of personal data to deliver targeted advertising. Individuals are now more aware of options related to consent, "do not track" mechanisms (such as browser signals from the Global Privacy Control), and "ad-blocking" software to prevent the collection of their personal data for targeted advertising purposes. As a result, we may be required to change the way we market our products, face increased challenges to our ability to reach new or existing customers, and compliance with these laws may require us to make significant operational changes or otherwise negatively affect our business.

 Our employees and personnel use Emerging AI Technologies to perform their work, and the disclosure and use of personal data in Emerging AI Technologies may be subject to various data privacy and security laws and other privacy obligations. Governments have passed and are likely to pass additional laws regulating AI, including Emerging AI Technologies. Our use of Emerging AI Technologies could result in additional compliance costs, regulatory investigations and actions, and consumer lawsuits. If we are unable to use Emerging AI Technologies, it could make our business less efficient and result in competitive disadvantages.

 We use AI, including Emerging AI Technologies in our products and services (collectively, "AI" technologies). The development and use of AI present various data privacy and security risks that may impact our business. Use of AI is subject to data privacy and security laws, as well as increasing regulation and scrutiny. Several jurisdictions around the globe, including Europe and certain U.S. states, have proposed or enacted laws governing AI. For example, the European Union's Artificial Intelligence Act ("EU AI Act") imposes strict requirements for the use of AI, and we expect other jurisdictions will adopt similar laws. Additionally, certain privacy laws extend rights to consumers (such as the right to delete certain personal data) and regulate automated decision making, which may be incompatible with our use of AI. These obligations may make it harder for us to conduct our business using AI, lead to regulatory fines or penalties, require us to change our business practices, retrain our AI, or prevent or limit our use of AI. For example, the FTC has required other companies to turn over (or disgorge) valuable insights or trainings generated through the use of AI where they allege the company has violated privacy and consumer protection laws. If we cannot use AI or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage.

 Additionally, under various privacy laws and other obligations, we may be required to obtain certain consents to process personal data. For example, some of our data processing practices may be challenged under wiretapping laws, if we obtain consumer information from third parties through various methods, including chatbot and session replay providers, or via third-party marketing pixels. These practices may be subject to increased challenges by class action plaintiffs. Our inability or failure to obtain consent for these practices could result in adverse consequences, including class action litigation and mass arbitration demands.

 In addition, we may be unable to transfer personal data from Europe and other jurisdictions to the United States or other countries due to data localization requirements or limitations on cross-border data flows. Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries. In particular, the EEA and the UK have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it generally believes are inadequate. Other jurisdictions may adopt or have already adopted similarly stringent data localization and cross-border data transfer laws. Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA standard contractual clauses, the UK's International Data Transfer Agreement / Addendum, and the EU-U.S. Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.

 If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business. Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups. Some European regulators have ordered certain companies to suspend or permanently cease certain transfers of personal data out of Europe for allegedly violating the GDPR's cross-border data transfer limitations.

 In addition to data privacy and security laws, we are contractually subject to industry standards adopted by industry groups, we are, or and may become subject to such obligations in the future. We are also bound by contractual obligations related to data privacy and security, which have become increasingly stringent and complex due to changes in data privacy and security laws and regulations, and our efforts to comply with such obligations may not be successful. For example, certain privacy laws, such as the GDPR and the CCPA, require our customers to impose specific contractual restrictions on their service providers.

 We publish privacy policies, marketing materials, and other statements, such as statements related to compliance with certain certifications or self-regulatory principles, concerning data privacy and security. Regulators in the United States are increasingly scrutinizing these statements, and if these policies, materials, or statements are found to be deficient, lacking in transparency, deceptive, unfair, misleading, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.

 Obligations related to data privacy and security (and consumers' data privacy expectations) are quickly changing, becoming increasingly stringent, and creating uncertainty. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions. Preparing for and complying with these obligations requires us to devote significant resources, which may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process personal data on our behalf. In addition, these obligations may require us to change our business model.

 We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or third parties with whom we work, may fail to comply with such obligations, which could negatively impact our business operations. If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans or restrictions on processing personal data; and orders to destroy or not use personal data. In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands. Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.

 Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to: loss of customers, inability to process personal data or to operate in certain jurisdictions; limited ability to develop or commercialize our products and services; expenditure of time and resources to defend any claim or inquiry; adverse publicity; or substantial changes to our business model or operations.

 Failure to comply with governmental laws and regulations could harm our business.

 Our business is subject to regulation by various federal, state, local, and foreign governments. For example, the Telephone Consumer Protection Act of 1991 restricts telemarketing and the use of automatic short message service ("SMS") text messages without proper consent. The scope and interpretation of the laws that are or may be applicable to the delivery of text messages and other communications are continuously evolving and developing. If we do not comply with these laws or regulations or if we become liable under these laws or regulations due to the failure of our customers to comply with these laws by obtaining proper consent, we could face direct liability. In certain jurisdictions, these regulatory requirements may be more stringent than those in the United States. Noncompliance with applicable regulations or requirements could also limit the features in our platform related to SMS text messaging or other communications in various jurisdictions, result in loss of customers, and subject us to customer litigation or investigations, sanctions, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties, injunctions, or other collateral consequences. If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, results of operations, and financial condition could be materially adversely affected. In addition, responding to any action will likely result in a significant diversion of management's attention and resources and an increase in professional fees. Enforcement actions and sanctions could harm our business, reputation, results of operations, and financial condition.

 Increased government scrutiny of the technology industry could negatively affect our business.

 The technology industry is subject to intense media, political, and regulatory scrutiny, which exposes us to government investigations, legal actions, and penalties. Various regulatory agencies, including competition, consumer protection, and privacy authorities, have active proceedings and investigations concerning multiple technology companies. Although we are not currently aware of any such investigations, if investigations targeted at other companies result in determinations that practices we follow are unlawful, including practices related to use of machine- and customer-generated data or AI, we could be required to change our products and services or alter our business operations, which could harm our business. Legislators and regulators also have proposed new laws and regulations intended to restrain the activities of technology companies. If such laws or regulations are enacted, they could have impacts on us, even if they are not intended to affect our company. In addition, the introduction of new products, expansion of our activities in certain jurisdictions, or other actions that we may take may subject us to additional laws, regulations, or other government scrutiny. The increased scrutiny of certain acquisitions in the technology industry also could affect our ability to enter into strategic transactions or to acquire other businesses. Compliance with new or modified laws and regulations could increase our cost of conducting the business, limit the opportunities to increase our revenues, or prevent us from offering products or services.

 Further, as a result of new SEC rules and regulations, we are required to disclose additional information about the business, including human capital and diversity, and climate change and sustainability. Similar laws and regulations are enacted or proposed in California, the EU and various other jurisdictions. Compliance with any such new laws and regulations will be costly, time consuming and, as a global commercial organization, require expenditure of our limited resources to be in compliance with the various standards across the jurisdictions in which we operate. Failure to adequately meet these new and upcoming disclosure requirements may affect the manner and locations in which we choose to conduct our business and could adversely affect our profitability and returns to our investors. Any failure or perceived failure by us in this regard could have a material adverse effect on our reputation with investors, governments, customers, employees, other third parties, and the communities and industries in which we operate, and on our business, share price, financial condition, and access to capital or results of operations, including the sustainability of our business over time.

 We also could be harmed by government investigations, litigation, or changes in laws and regulations directed at our business partners, or suppliers in the technology industry that have the effect of limiting our ability to do business with those entities or that affect the services we can obtain from them. For example, the U.S. government recently has taken action against companies operating in China, intended to limit their ability to do business in the U.S. or with U.S. companies. There can be no assurance that our business will not be materially adversely affected, individually or in the aggregate, by the outcomes of such investigations, litigation, or changes to laws and regulations in the future.

 Our sales to government entities and highly regulated organizations are subject to a number of challenges and risks.

 We sell to U.S. federal, state, and local, as well as foreign, governmental agency customers, as well as to customers in highly regulated industries such as financial services, pharmaceuticals, insurance, healthcare, and life sciences. Sales to such entities are subject to a number of challenges and risks.

 Some such entities have industry-specific compliance requirements relating to certain security or regulatory standards, such as U.S. Federal Risk and Authorization Management Program ("FedRAMP"), that may be required to compete effectively. Working towards compliance with these standards can be expensive and time-consuming. If we cannot adequately comply with particular compliance requirements, our growth may be adversely impacted. For example, we are in the process of seeking FedRAMP authorization for PagerDuty Operations Cloud and if we fail to obtain and maintain such authorization, we will not be able to sell PagerDuty Operations Cloud, directly or indirectly, to certain federal government and other public sector customers as well as private sector customers that require such certification for their intended use cases, which could harm our growth, business, and results of operations. This may also harm our competitive position against other enterprises whose competitive offerings are FedRAMP authorized.

 Further, there can be no assurance that we will secure commitments or contracts with government entities even if we obtain such certifications, which could harm our margins, business, financial condition, and results of operations. Selling to such entities can be highly competitive, expensive, and time-consuming, often requiring significant upfront time and expense without any assurance that these efforts will generate a sale. Government contracting requirements may change and in doing so restrict our ability to sell into the government sector until we have attained the revised certification. Government demand and payment for our offerings are affected by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our offerings.

 Further, governmental and highly regulated entities may demand contract terms that differ from our standard arrangements and may require expensive and time- consuming compliance efforts. Such entities may have statutory, contractual, or other legal rights to terminate contracts with us or our partners due to a default or for other reasons. Any such termination may adversely affect our reputation, business, results of operations, and financial condition.

 We are subject to government regulation, including export, import and economic sanctions laws and regulations, that may impair our ability to compete in international markets or subject us to liability if we fail to comply.

 Our platform is subject to U.S. export controls, including the Export Administration Regulations, and we incorporate encryption technology into certain of our products. These encryption products and the underlying technology may be exported outside of the United States only with the required export authorizations, including by license, a license exception, or other appropriate government authorizations, including the filing of an encryption classification request or self-classification report. Furthermore, our activities are subject to U.S. economic sanctions laws and regulations administered by the Office of Foreign Assets Control that prohibit dealings with embargoed jurisdictions or sanctioned parties without the required licenses or government authorizations.

 Obtaining the necessary licenses or other authorizations for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities. While we have implemented precautions to comply with applicable export, import, and economic sanctions laws and regulations, including obtaining authorizations for our encryption products and implementing IP address blocking and screenings against U.S. government and international lists of restricted and prohibited persons, we cannot guarantee that the precautions we take will entirely prevent violations. If we fail to comply, we and certain of our employees could be adversely affected through fines or penalties, reputational harm, government investigations, and possible incarceration for responsible employees and managers.

 If our channel partners fail to comply with these laws and regulations, we may also be adversely affected through reputational harm, as well as other negative consequences, including government investigations and penalties.

 Also, in addition to the United States, various countries regulate the import and export of certain encryption products and technology in ways that could limit our ability to distribute our products or could limit our end-customers' ability to implement our products in those international markets.

 Any change in export, import, or economic sanctions laws and regulations, shift in the enforcement or scope of existing laws and regulations, or changes in the countries, governments, persons or technologies targeted by such laws and regulations, could also result in decreased use of our products and solutions, or in our decreased ability to export or sell our products and solutions to existing or potential customers. Any decreased use of our products and solutions or limitation on our ability to export or sell our products and solutions would likely adversely affect our business, financial condition and results of operations, and growth prospects.

 Servicing our debt may require a significant amount of cash. We may not have sufficient cash flow from our business to pay our indebtedness, and we may not have the ability to raise the funds necessary to settle for cash conversions of our convertible senior notes due 2025 (the "2025 Notes") or our convertible senior notes due 2028 (the "2028 Notes" and together with the 2025 Notes, the "Notes"), or to repurchase the Notes for cash upon a fundamental change, which could adversely affect our business and results of operations.

 In June 2020, we completed the private offering of 2025 Notes, issuing an aggregate principal amount of $287.5 million of 1.25% convertible senior notes due 2025. In October 2023, we repurchased $230.0 million aggregate principal amount of the 2025 Notes in privately negotiated transactions with holders of the 2025 Notes and as of January 31, 2025, we had $57.5 million aggregate principal amount of the 2025 Notes outstanding. The interest rate on the 2025 Notes is fixed at 1.25% per annum and is payable semi-annually in arrears on January 1 and July 1 of each year. In October 2023, we completed the private offering of 2028 Notes, issuing an aggregate principal amount of $402.5 million of 1.50% convertible senior notes due 2028. The interest rate on the 2028 Notes is fixed at 1.50% per annum and is payable semi-annually in arrears on April 15 and October 15 of each year. Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance our indebtedness, including the Notes, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control. Our business may not generate cash flows from operations in the future that are sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flows, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt, or obtaining additional debt financing or equity capital on terms that may be onerous or highly dilutive. Our ability to refinance any future indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations. In addition, any of our future debt agreements may contain restrictive covenants that may prohibit us from adopting any of these alternatives.

 Holders of the Notes have the right to require us to repurchase their Notes upon the occurrence of a fundamental change (as defined in the relevant indenture governing the Notes) at a repurchase price equal to 100% of the principal amount of the relevant Notes to be repurchased, plus accrued and unpaid interest, if any. In addition, upon any conversion of the Notes, we will be required to make cash payments for each $1,000 in principal amount of the Notes converted. of at least the lesser of $1,000 and the sum of the daily conversion values (as defined in the relevant indenture governing the Notes). We may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of Notes surrendered or pay cash with respect to Notes being converted and our ability to pay may additionally be limited by law, by regulatory authority, or by agreements governing our existing and future indebtedness. Our failure to repurchase the Notes at a time when the repurchase is required by the relevant indenture governing the Notes or to pay any cash payable on future conversions as required by such indenture would constitute a default under such indenture. A default under the relevant indenture or the fundamental change itself could also lead to a default under agreements governing our existing and future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Notes or make cash payments upon conversions thereof.

 In addition, our indebtedness, combined with our other financial obligations and contractual commitments, could have other important consequences. For example, it could:

 • make us more vulnerable to adverse changes in general U.S. and worldwide economic, industry, and competitive conditions and adverse changes in government regulation;
 • limit our flexibility in planning for, or reacting to, changes in our business and our industry;
 • place us at a disadvantage compared to our competitors who have less debt;
 • limit our ability to borrow additional amounts for funding acquisitions, for working capital, and for other general corporate purposes; and
 • make an acquisition of our company less attractive or more difficult.

 Any of these factors could harm our business, results of operations, and financial condition. In addition, if we incur additional indebtedness, the risks related to our business and our ability to service or repay our indebtedness would increase.

 The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and results of operations.

 In the event the conditional conversion feature of the applicable series of Notes is triggered, holders of such series of Notes will be entitled to convert the Notes at any time during specified periods at their option. If one or more holders elect to convert their Notes, we would be required to settle any unconverted principal amount of such Notes through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a portion of the applicable outstanding principal of the Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

 Transactions relating to our Notes may affect the value of our common stock.

 The conversion of some or all of the Notes would dilute the ownership interests of existing stockholders to the extent we elect to deliver shares of common stock in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the Notes being converted. Our Notes may become convertible in the future at the option of their holders under certain circumstances. If holders of our Notes elect to convert their Notes, we may settle our conversion obligation by delivering to them a significant number of shares of our common stock, which would cause dilution to our existing stockholders.

 In addition, in connection with the issuance of the 2025 Notes and the 2028 Notes, we entered into capped call transactions (the "Capped Calls") with certain financial institutions (the "Option Counterparties"). The Capped Calls are expected generally to reduce the potential dilution to our common stock upon any conversion or settlement of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap.

 In connection with establishing their initial hedges of the Capped Calls, the Option Counterparties or their respective affiliates entered into various derivative transactions with respect to our common stock and/or purchased shares of our common stock concurrently with or shortly after the pricing of the Notes.

 From time to time, the Option Counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivative transactions with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2025 Notes or the 2028 Notes, as the case may be, with respect to the Capped Calls corresponding to the 2025 Notes or the 2028 Notes, as applicable (and are likely to do so on each exercise date of the Capped Calls, which are scheduled to occur during the observation period relating to any conversion of the 2025 Notes on or after April 1, 2025 or any conversion of the 2028 Notes on or after June 15, 2028, in each case, that is not in connection with a redemption, or following our election to terminate any portion of the Capped Calls in connection with any repurchase, redemption, exchange, or early conversion of the 2025 Notes or the 2028 Notes). This activity could cause a decrease and/or increased volatility in the market price of our common stock.

 We do not make any representation or prediction as to the direction or magnitude of any potential effect that the transactions described above may have on the price of the Notes or our common stock. In addition, we do not make any representation that the Option Counterparties will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

 We are subject to counterparty risk with respect to the Capped Calls.

 The Option Counterparties are financial institutions, and we will be subject to the risk that any or all of them might default under the Capped Calls. Our exposure to the credit risk of the Option Counterparties will not be secured by any collateral. Past global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions. If an Option Counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the Capped Calls with such Option Counterparty. Our exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the market price and in the volatility of our common stock. In addition, upon a default by an Option Counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock. We can provide no assurances as to the financial stability or viability of the Option Counterparties.

 We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all.

 We have funded our operations since inception primarily through equity financings, debt financing, and sales of subscriptions to our products. We cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business. We intend to continue to make investments to support our business, which may require us to engage in equity or debt financings to secure additional funds. Additional financing may not be available on terms favorable to us, if at all. If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, operating results, and financial condition. If we incur additional debt, the debt holders would have rights senior to holders of common stock to make claims on our assets, and the terms of any debt could restrict our operations. Furthermore, if we issue additional equity securities, stockholders will experience dilution, and the new equity securities could have rights senior to those of our common stock. Because our decision to issue securities in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuance of debt or equity securities. As a result, our stockholders bear the risk of future issuance of debt or equity securities reducing the value of our common stock and diluting their interests.

 We have acquired, and may in the future acquire, other businesses, which could require significant management attention, disrupt our business, or dilute stockholder value.

 As part of our business strategy, we have acquired, and may in the future acquire, other companies, employee teams, or technologies to complement or expand our products, obtain personnel, or otherwise grow our business. For example, in the third quarter of fiscal year 2021, we acquired Rundeck, a leading provider of DevOps automation for enterprise, in the first quarter of fiscal year 2023, we acquired Catalytic, a provider of enterprise-wide process automation, and in the fourth quarter of fiscal year 2024, we acquired Jeli, a provider of incident analysis for enterprises. The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating, and pursuing suitable acquisitions, whether or not they are consummated.

 We have limited experience making acquisitions. We may not be able to find suitable acquisition candidates and we may not be able to complete acquisitions on favorable terms, if at all. If we do complete acquisitions, we may not ultimately strengthen our competitive position or achieve the anticipated benefits from such acquisitions, due to a number of factors, including but not limited to:

 • acquisition-related costs, liabilities, or tax impacts, some of which may be unanticipated;
 • difficulty integrating and retaining the personnel, intellectual property, technology infrastructure, and operations of an acquired business;
 • ineffective or inadequate, controls, procedures, or policies at an acquired business, including cybersecurity risks and vulnerabilities;
 • multiple product lines or services offerings, as a result of our acquisitions, that are offered, priced, and supported differently;
 • potential unknown liabilities or risks associated with an acquired business, including those arising from existing contractual obligations or litigation matters;
 • inability to maintain relationships with key customers, suppliers, and partners of an acquired business;
 • lack of experience in new markets, products, or technologies;
 • diversion of management's attention from other business concerns; and
 • use of resources that are needed in other parts of our business.

 In addition, a significant portion of the purchase consideration of companies we acquire may be allocated to acquired goodwill. We review goodwill for impairment at least annually. In the future, if our acquisitions do not yield expected returns, we may be required to record impairment charges based on this assessment, which could adversely affect our results of operations.

 We may not be able to integrate acquired businesses successfully or effectively manage the combined company following an acquisition. If we fail to successfully integrate acquisitions, or the people or technologies associated with those acquisitions, the results of operations of the combined company could be adversely affected. Any integration process will require significant time, resources, and attention from management, and may disrupt the ordinary functioning of our business, and we may not be able to manage the process successfully, which could adversely affect our business, results of operations, and financial condition.

 Any acquisition we complete could be viewed negatively by users, customers, partners, or investors, and could have adverse effects on our existing business relationships. In addition, we may not successfully evaluate or utilize acquired product or technology or accurately forecast the financial impact of an acquisition transaction, including accounting charges.

 We may have to pay a substantial portion of our available cash, incur debt, or issue equity securities to pay for any such acquisitions, each of which could affect our financial condition or the value of our capital stock. The sale of equity to finance any such acquisitions could result in dilution to our stockholders. If we incur more debt, it would result in increased fixed obligations and would also subject us to covenants or other restrictions that could impede our ability to flexibly operate our business.

 Risks Related to Ownership of Our Common Stock

 Our stock price may be volatile, and the value of our common stock may decline.

 The market price of our common stock may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including:

 • actual or anticipated fluctuations in our operating results or financial condition;
 • variance in our financial performance from expectations of securities analysts;
 • changes in the pricing of subscriptions to our platform and products;
 • changes in our ability to acquire and retain customers, as well as our ability to expand our customers' usage of our platform;
 • changes in our projected operating and financial results;
 • changes in laws or regulations applicable to our platform and products;
 • announcements by us or our competitors of significant business developments, acquisitions, or new offerings;
 • our involvement in litigation;
 • future sales of our common stock by us or our stockholders, including our large stockholders, or perceptions that such sales might occur;
 • changes in senior management or key personnel;
 • the trading volume of our common stock;
 • changes in the anticipated future size and growth rate of our market; and
 • general economic and market conditions.

 Broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions, including the impact of the effects of a general slowdown in the global economy, geopolitical conflicts, and inflationary pressures, may also negatively impact the market price of our common stock. In the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future, which could result in substantial expenses and divert our management's attention.

 Future sales of our common stock in the public market could cause the market price of our common stock to decline.

 Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that such sales may have on the prevailing market price of our common stock.

 In addition, we filed a registration statement to register shares reserved for future issuance under our equity compensation plans. As a result, subject to the satisfaction of applicable exercise and/or vesting periods, the shares issued upon exercise of outstanding stock options or upon settlement of outstanding RSU awards will be available for immediate resale in the U.S. in the open market.

 Furthermore, a substantial number of shares of our common stock is reserved for issuance upon the exercise of the Notes. If we elect to satisfy our conversion obligation on the Notes solely in shares of our common stock upon conversion of the Notes, we will be required to deliver the shares of our common stock, together with cash for any fractional share, on the second business day following the relevant conversion date.

 We may issue our shares of common stock or securities convertible into our common stock from time to time in connection with financings, acquisitions, investments, or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and cause the trading price of our common stock to decline.

 If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, our stock price and trading volume could decline.

 Our stock price and trading volume is heavily influenced by the way analysts and investors interpret our financial information and other disclosures.

 Further, the trading market for our common stock depends, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If securities or industry analysts do not publish research or reports about our business, downgrade our common stock, or publish negative reports about our business, our stock price would likely decline. If the number of analysts that cover us declines, demand for our common stock could decrease and our common stock price and trading volume may decline.

 We do not have any control over the analysts that cover our common stock or the measures that analysts or investors may rely upon to forecast our future results. Over-reliance by analysts or investors on any particular metric to forecast our future results may result in forecasts that differ significantly from our own. Regardless of accuracy, unfavorable interpretations of our financial information and other public disclosures could have a negative impact on our stock price. If our financial performance fails to meet analyst estimates, for any of the reasons discussed above or otherwise, or one or more of the analysts who cover us downgrade our common stock or change their opinion of our common stock, our stock price would likely decline.

 We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

 We have never declared or paid any cash dividends on our capital stock, and we do not intend to pay any cash dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

 If our internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results, prevent fraud, or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our stock price.

 The Sarbanes-Oxley Act of 2002 requires that we maintain effective internal control over financial reporting and disclosure controls and procedures. In particular, we must perform system and process evaluation, document our controls, and perform testing of our key control over financial reporting to allow management and our independent public accounting firm to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. Our testing, or the subsequent testing by our independent public accounting firm, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses. If we are not able to continue to comply with the requirements of Section 404 in a timely manner, or if we or our accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock would likely decline and we could be subject to lawsuits, sanctions, or investigations by regulatory authorities, including SEC enforcement actions, and we could be required to restate our financial results, any of which would require additional financial and management resources.

 We continue to invest in more robust technology and in more resources in order to manage those reporting requirements. Implementing the appropriate changes to our internal controls may distract our officers and employees, result in substantial costs, and require significant time to complete. Any difficulties or delays in implementing these controls could impact our ability to timely report our financial results. For these reasons, we may encounter difficulties in the timely and accurate reporting of our financial results, which would impact our ability to provide our investors with information in a timely manner. As a result, our investors could lose confidence in our reported financial information, and our stock price could decline.

 Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.

 Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing a change of control or changes in our management. Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that:

 • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our common stock;
 • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;
 • specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, or our chief executive officer;
 • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;
 • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms;
 • prohibit cumulative voting in the election of directors;
 • provide that our directors may be removed for cause only upon the vote of sixty-six and two-thirds percent (66 2/3%) of our outstanding shares of common stock;
 • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; and
 • require the approval of our board of directors or the holders of at least sixty-six and two-thirds percent (66 2/3%) of our outstanding shares of common stock to amend our bylaws and certain provisions of our certificate of incorporation.

 These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any "interested" stockholder for a period of three years following the date on which the stockholder became an "interested" stockholder. Any of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our common stock, and they could deter potential acquirers of our company, thereby reducing the likelihood that you would receive a premium for your shares of our common stock in an acquisition.

 Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware and, to the extent enforceable, the federal district courts of the United States of America as the exclusive forums for substantially all disputes between us and our stockholders, which restricts our stockholders' ability to choose the judicial forum for disputes with us or our directors, officers, or employees.

 Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:
 • any derivative action or proceeding brought on our behalf;
 • any action asserting a breach of a fiduciary duty;
 • any action asserting a claim against us arising pursuant to the Delaware General Corporation Law,
 • our amended and restated certificate of incorporation, or our amended and restated bylaws; or
 • any action asserting a claim against us that is governed by the internal affairs doctrine.

 The provisions do not apply to suits brought to enforce a duty or liability created by the Exchange Act. In addition, our amended and restated certificate of incorporation provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. Although the Delaware Supreme Court recently held that such exclusive forum provisions are facially valid, courts in other jurisdictions may find such provisions to be unenforceable. These choice of forum provisions may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees. If a court were to find either choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.

 General Risks

 The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, especially now that we are no longer an "emerging growth company."

 As a public company, we are required to comply with various regulatory and reporting requirements, including those required by the SEC. Complying with these reporting and other regulatory requirements is time-consuming and will continue to result in costs to us and could have a negative effect on our business, financial condition, and results of operations. We are subject to the requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the New York Stock Exchange, and other applicable securities rules and regulations that impose various requirements on public companies. As a result, we are required to devote significant management effort and incur additional expenses, which include higher legal fees, accounting and related fees, and fees associated with investor relations activities, among others, to ensure compliance with the various reporting requirements. These requirements may also place a strain on our systems and processes. The Exchange Act requires that we file annual, quarterly, and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. To maintain the effectiveness of our disclosure controls and procedures, we may need to commit significant resources, hire additional staff, and provide additional management oversight. We have been and will be continuing to implement additional procedures and processes for the purpose of addressing the standards and requirements applicable to us as a public company. Sustaining our growth as a public company also requires us to commit additional management, operational, and financial resources to identify new professionals to join our company and to maintain appropriate operational and financial systems to adequately support expansion. These activities may divert management's attention from other business concerns, which could have a material adverse effect on our business, financial condition, and results of operations. We cannot predict or estimate the amount of additional costs we may continue to incur as a result of being a public company or the timing of such costs.

 We are obligated to develop and maintain proper and effective internal controls over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our common stock.

 We are required to furnish a report by management on the effectiveness of our internal control over financial reporting. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting. In addition, our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting. Our compliance with these requirements will continue to require that we incur substantial accounting expenses and expend significant management efforts.

 During the evaluation and testing process of our internal controls, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to certify that our internal control over financial reporting is effective. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by the New York Stock Exchange, the SEC, or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

 Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.

 U.S. generally accepted accounting principles ("U.S. GAAP"), is subject to interpretation by the Financial Accounting Standards Board ("FASB"), the SEC and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported results of operations and financial condition and could affect the reporting of transactions already completed before the announcement of a change.

 Item 1B. Unresolved Staff Comments

 None.

 Item 1C. Cybersecurity

 Risk management and strategy

 We have implemented and maintain various information security processes designed to identify, assess, and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic, or competitive in nature, customer data, and personal information (collectively, "Information Systems and Data").

 Our Chief Information Security Officer ("CISO"), along with the information security, engineering, and legal functions at the Company, help identify, assess, and manage the Company's cybersecurity threats and risks. They work to identify and assess risks from cybersecurity threats by monitoring and evaluating the threat environment using various methods including manual and automated tools, subscribing to reports and services that identify cybersecurity threats, evaluating our and our industry's risk profile, conducting audits and threat assessments, conducting vulnerability assessments, and external threat intelligence.

 Depending on the environment, system, and data, we implement and maintain certain technical and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: incident response procedures, vulnerability management process, disaster recovery/business continuity plans, encryption, network security controls, user access controls including multifactor authentication and role-based access, data segregation, asset management, systems monitoring, vendor risk management program, employee training, penetration testing, cybersecurity insurance, and dedicated cybersecurity staff.

 Our assessment and management of material risks from cybersecurity threats are integrated into the Company's overall risk management processes, including by prioritizing our risk management processes and mitigating cybersecurity threats that are more likely to lead to a material impact to our business.

 We use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including, for example, professional services firms, cybersecurity consultants, managed cybersecurity service providers, and penetration testing firms.

We also use third-party service providers to perform a variety of functions throughout our business, such as application providers, hosting companies, and various supply chain resources. We have a vendor management program to manage cybersecurity risks associated with our use of these providers which includes, depending on the vendor, nature of the services provided, and sensitivity of the Information Systems and Data at issue: different levels of assessment designed to help identify cybersecurity risks associated with the vendor, security questionnaires, review of security assessments, and imposition of contractual obligations related to cybersecurity.

 For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part I. Item 1A. Risk Factors in this Annual Report on Form 10-K.

 Governance

 Our board of directors oversees the Company's cybersecurity risk management as part of its general oversight function. The board of directors' audit committee is responsible for overseeing the Company's cybersecurity risk management processes, including oversight of mitigation of risks from cybersecurity threats.

 Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Chief Technology Officer ("CTO"), CISO, and Chief Information Officer ("CIO"), who have decades of experience in cybersecurity and information technology. Our CTO has extensive experience in computer science, and our CISO has extensive experience in computer security and enterprise data.

 Company management, including the CTO, CISO, and CIO, is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company's overall risk management strategy, and communicating key priorities to relevant personnel. Management is also responsible for approving budgets for spending on cybersecurity, helping prepare for cybersecurity incidents, and approving cybersecurity processes.

 Our cybersecurity incident response and vulnerability management processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including to the CISO, CTO, and CIO, as appropriate. The CTO, CISO, and CIO work with the Company's incident response team to help the Company mitigate and remediate such cybersecurity incidents. In addition, the Company's incident response and vulnerability management processes include updates to the audit committee of the board of directors as appropriate.

 The audit committee receives periodic reports from the CTO and/or CISO concerning the company's significant cybersecurity threats and risk and the processes the Company has implemented to address them. The audit committee also receives various reports, summaries or presentations related to the Company's cybersecurity threats, risk and mitigation. The audit committee will keep the full board of directors apprised of the company's cybersecurity risk processes and significant developments related to cybersecurity.

 Item 2. Properties

 Our corporate headquarters is located in San Francisco, California, and consists of approximately 42,118 square feet of space under a lease that expires in fiscal 2029.

 We also have office locations in Atlanta, Georgia; Toronto, Canada; Santiago, Chile; London, England; Sydney, Australia; Lisbon, Portugal; and Tokyo, Japan.

 Item 3. Legal Proceedings

 From time to time, we are involved in various legal proceedings arising from the normal course of business activities. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows, or financial condition.

 Item 4. Mine Safety Disclosures

 Not applicable.

 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Market Information for Common Stock

 Our common stock has been listed on the New York Stock Exchange ("NYSE") under the symbol "PD" since April 11, 2019. Prior to that date, there was no public trading market for our common stock.

 Holders of Record

 As of January 31, 2025, we had 22 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.

 Dividend Policy

 We have never declared or paid any cash dividends on our capital stock. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our Board of Directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions, and other factors that our Board of Directors may deem relevant.

 Securities Authorized for Issuance Under Equity Compensation Plans

 The information required by this Item is incorporated by reference to the definitive Proxy Statement for our 2025 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2025.

 Stock Performance Graph

 This performance graph shall not be deemed "soliciting material" or to be "filed" with the Securities and Exchange Commission, or the SEC, for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act.

 The following graph compares: (i) the cumulative total stockholder return on our common stock from April 11, 2019 (the date our common stock commenced trading on the NYSE) through January 31, 2025; with (ii) the cumulative total return of the Standard & Poor ("S&P") 500 Index, and the S&P Software & Services Select Industry Index over the same period, assuming the investment of $100 in our common stock and in both of the other indices on April 11, 2019 and the reinvestment of dividends. The graph uses the closing market price on April 11, 2019 of $38.25 per share as the initial value of our common stock. As discussed above, we have never declared or paid a cash dividend on our common stock and do not anticipate declaring or paying a cash dividend in the foreseeable future.

 Unregistered Sales of Equity Securities and Use of Proceeds

 Unregistered Sales of Equity Securities

 None.

 Use of Proceeds

 None.

 Issuer Purchases of Equity Securities

 The following table presents information with respect to our repurchases of common stock during the three months ended January 31, 2025:

 Period

 Total number of shares purchased(1)

 Average price paid per share(2)

 Total number of shares purchased as part of publicly announced program(1)

 Approximate dollar value of shares that may yet be purchased under publicly announced program (in thousands)(1)

 November 1 - 30, 2024
 79,062
 $
 18.41
 79,062
 $
 —

 December 1 - 31, 2024
 —
 $
 —
 —
 $
 —

 January 1 - 31, 2025
 —
 $
 —
 —
 $
 —

 Total
 79,062
 79,062

 (1) In May 2024, our Board of Directors authorized a stock repurchase program of up to $100.0 million of our common stock. Share repurchases under share repurchase program may be made from time to time on the open market, pursuant to Rule 10b5-1 trading plans, or other legally permissible means. The share repurchase program does not obligate us to acquire a specified number of shares, and may be suspended, modified, or terminated at any time, without prior notice. The number of shares repurchased was dependent on market conditions and other factors. The share repurchase program was completed in November 2024, as the dollar value of shares to be repurchased as authorized by the Board of Directors was reached. See Note 12, Common Stock and Stockholders' Equity elsewhere this Annual Report on Form 10-K for additional information related to share repurchases.
 (2) Average price paid per share excludes cash paid for commissions.

 Item 6. [Reserved]

 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 The following discussion and analysis of the financial condition and results of operations of PagerDuty, Inc. and its wholly-owned subsidiaries, and subsidiaries in which PagerDuty, Inc. holds a controlling interest ("PagerDuty," "we," "us" or "our") should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K (this "Form 10-K"). This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, adverse effects on our business and general economic conditions due to those identified below, and those discussed in the section titled "Risk Factors" included elsewhere in this Form 10-K. The last day of our fiscal year is January 31. Our fiscal quarters end on April 30, July 31, October 31 and January 31.

 In this section, we discuss the results of our operations for the year ended January 31, 2025 compared to the year ended January 31, 2024. For a discussion of the year ended January 31, 2024 compared to the year ended January 31, 2023, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended January 31, 2024.

 Overview

 PagerDuty, Inc. is a global leader in digital operations management, enabling customers to achieve operational efficiency at scale and transform critical work for modern enterprises. The PagerDuty Operations Cloud combines artificial intelligence ("AI") operations ("AIOps"), automation, customer service operations, and incident management with a generative AI assistant to create a flexible, resilient, and scalable platform to protect revenue and improve customer experience, accelerate innovation, improve operational efficiency, and mitigate risk of operational failures.

 Today, nearly every business is a digital business. From retail to financial services, from travel and entertainment to supply chain logistics, everyday commerce relies on an incredibly complex network of digital infrastructure, systems, software, and teams. And while that complexity is only increasing, the need for those digital operations to be resilient is also rising, as organizations face pressure to meet escalating customer expectations, resolve incidents proactively, and deliver innovation without increasing costs. In this environment, the ability to anticipate, orchestrate, and resolve time-sensitive, critical and unplanned work before it escalates is a critical requirement for success.

 Since our founding in 2009, we have expanded our capabilities from a single product focused on on-call management for developers to a multi-product platform that crosses the silos of development, information technology ("IT") infrastructure and operations, security, customer service, and business operations and reaches executive stakeholder roles across an organization. Today, we collect data and digital signals from virtually any software-enabled system or device and leverage AI and machine learning to correlate, process, and predict opportunities and incidents. Using incident management, automation, AI operations, and customer service operations, our platform for digital operations brings together the right people with the right information so they can resolve issues and act on opportunities in minutes or seconds from wherever they are. In addition, our generative AI capabilities allow organizations to manage mission-critical tasks smarter and faster.

 We have spent more than a decade building deep product integrations to our platform, and our ecosystem now includes over 700 direct integrations to enable our customers to gather and correlate digital signals from their technology stack. This allows technical teams to collect digital signals from nearly any system or platform in their environment without the effects of context switching. Those same integrations connect with popular collaboration tools and business applications within modern and legacy technology stacks to drive automation of work.

 We generate revenue primarily from cloud-hosted software subscription fees. We also generate revenue from term-license software subscription fees. PagerDuty has a land-and-expand business model that leads to viral adoption and expansion of our products. Although the PagerDuty platform can be used by any size of company, from small to mid-market to enterprise companies, we have increasingly focused our go-to-market motion, including our field sales team, on serving enterprise customers. Nearly half of the Fortune 500 and approximately two thirds of the Fortune 100 rely on PagerDuty as essential infrastructure for the modern enterprise.

 The PagerDuty sales and customer success teams drive expansion to additional users, new use cases, and additional products, as well as upgrades to higher-value plans. Our enterprise customers account for the majority of our revenue today. The PagerDuty platform is central to customer initiatives targeted at incident management transformation, operations center modernization, automation standardization, and customer experience operations. Our platform provides the technology to solve the customer problems underlying these and many other business initiatives.

 As of January 31, 2025, we had 15,114 paying customers globally, ranging from the most disruptive startups to established Fortune 100 companies across every industry including software and technology, financial services, telecommunications, retail, travel and hospitality, and media and entertainment. Our customers use our products across a broad range of use cases such as engineering, IT operations, security, and customer service. Of these customers, 849 customers contribute annual recurring revenue ("ARR") in excess of $100.0 thousand, and 72 customers contribute ARR in excess of $1.0 million. We define ARR as the annualized recurring revenue of all active contracts at the end of a reporting period. We define a customer as 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. Our 10 largest customers represented approximately 1% of our revenue for the fiscal year ended January 31, 2025, and no single customer represented more than 10% of our revenue in the same period, highlighting the breadth of our customer base. We serve a vital role in our customers' digital operations and grow with them as their needs expand. As such, we have developed a loyal customer base, with total ARR churn representing less than 5% of beginning ARR for the fiscal year ended January 31, 2025. Our ARR churn rate represents lost revenue from customers that were no longer contributing revenue at the end of the current period but did contribute revenue in the equivalent prior year period. We generally bill monthly subscriptions on a monthly basis and subscriptions with terms of greater than one year annually in advance.

 We expand within our existing customer base by adding more users, creating additional use cases, and upselling higher priced packages and additional products. Once our platform is deployed, we typically see increased expansion within our customer base. Our dollar-based net retention rate was 106% for the fiscal year ended January 31, 2025.

 We have an efficient operating model, which comes from a combination of our cloud-native architecture, optimal utilization of our third-party hosting providers, and prudent approach to headcount expansion. This has allowed us to achieve gross margin of 83.0% for the fiscal year ended January 31, 2025. Our strong gross margins allow us the flexibility to invest more in our platform and go-to-market function while maintaining strong operating leverage on our path to profitability.

 Macroeconomic Environment

 Our business and financial performance has and may continue to be subject to the effects of worldwide macroeconomic conditions, including, but not limited to, global inflation and heightened interest rates, existing and new laws and regulations, and economic uncertainty and volatility globally and in the jurisdictions in which we do business.

 We will continue to monitor the direct and indirect impacts of these or similar circumstances on our business and financial results. For additional information on the potential impact of macroeconomic conditions on our business, see Part I, Item 1A, Risk Factors.

 Key Factors Affecting Our Performance

 Attracting New Customers

 Sustaining our growth requires continued adoption of our platform by new customers. We will continue to invest in building brand awareness as we further penetrate our addressable markets. Our financial performance will depend in large part on the overall demand for our platform, particularly demand from enterprise customers, and our ability to meet the evolving needs of our customers. As of January 31, 2025, we had 15,114 paying customers spanning organizations of a broad range of sizes and industries, compared to 15,039 as of January 31, 2024.

 Expanding Within our Customer Base

 The majority of our revenue is generated from our existing customer base. Often, our customers expand the deployment of our platform across large teams and more broadly within the enterprise as they realize the benefits of our platform. We believe that our land and expand business model allows us to efficiently increase revenue from our existing customer base. Further, we will continue to invest in enhancing awareness of our brand, creating additional use cases, and developing more products, features, and functionality, which we believe are important factors to achieve widespread adoption of our platform.

 Sustaining Product Innovation and Technology Leadership

 Our success is dependent on our ability to sustain product innovation and technology leadership in order to maintain our competitive advantage. We believe that we have built a highly differentiated platform that will position us to further extend the adoption of our products. While sales of subscriptions to our incident management product account for a significant majority of our revenue, we intend to continue to invest in building additional products, features, and functionality that expand our capabilities and facilitate the extension of our platform to new use cases. Our future success is dependent on our ability to successfully develop, market, and sell these additional products to both new and existing customers.

 Continued Investment in Growth

 We plan to continue investing in our business so we can capitalize on our market opportunity. We intend to grow our sales team to target expansion within our enterprise customers and to attract new customers. We expect to continue to make focused investments in marketing to drive brand awareness and enhance the effectiveness of our self-service, low friction customer acquisition model. We also intend to continue adding headcount to our research and development team to develop new and improved products, features, and functionality. Although these investments may adversely affect our operating results in the near term, we believe that they will contribute to our long-term growth.

 Key Business Metrics

 We review the following key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.

 While these metrics are based on what we believe to be a reasonable representation of our customer base for the applicable period of measurement, we rely on a third party to validate legal entities using the best available data at period end, and therefore, these metrics are subject to change as new information becomes available. In addition, we are continually seeking to improve our methodology, which may result in future changes to our key metrics.

 Our key metrics include the results of Jeli, Inc. ("Jeli") and Catalytic, to the extent applicable, beginning on the respective acquisition dates of November 15, 2023 and March 8, 2022.

 Number of Customers

 We believe that the number of customers using our platform, particularly those that have subscription agreements for more than $100.0 thousand in ARR, are indicators of our market penetration, particularly within enterprise accounts, the growth of our business, and our potential future business opportunities. Increasing awareness of our platform and its broad range of capabilities, coupled with the fact that the world is always on and powered by increasingly complex technology, has expanded the diversity of our customer base to include organizations of all sizes across virtually all industries. Over time, enterprise customers have constituted a greater share of our revenue. The total number of paid customers and the number of customers with greater than $100.0 thousand in ARR were as follows as of the dates indicated:

 2025
 2024
 2023

 Customers
 15,114
 15,039
 15,244

 Customers greater than $100.0 thousand in ARR

 Dollar-based Net Retention Rate

 We use dollar-based net retention rate to evaluate the long-term value of our customer relationships, since this metric reflects our ability to retain and expand the ARR from our existing paid customers. Our dollar-based net retention rate compares our ARR from the same set of customers across comparable periods.

 We calculate dollar-based net retention rate as of a period end by starting with the ARR from the cohort of all paid customers as of 12 months prior to such period end ("Prior Period ARR"). We then calculate the ARR from these same customers as of the current period end ("Current Period ARR"). Current 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. The dollar-based net retention rate was as follows as of the dates indicated:

 Last 12 months ended January 31,

 2025
 2024
 2023

 Dollar-based net retention rate

 %
 %
 %

 Results of Operations

 The following table sets forth our consolidated statements of operations data for the periods indicated and as a percentage of revenue (in thousands, except percentages):

 2025
 2024

 $
 100.0
 %
 $
 100.0
 %

 Cost of revenue(1)

 79,665
 17.0
 %
 77,832
 18.1
 %

 Gross profit
 387,834
 83.0
 %
 352,867
 81.9
 %

 Operating expenses:

 Research and development(1)

 141,489
 30.3
 %
 139,769
 32.5
 %

 Sales and marketing(1)

 201,821
 43.2
 %
 196,769
 45.7
 %

 General and administrative(1)

 104,296
 22.3
 %
 112,575
 26.1
 %

 Total operating expenses
 447,606
 95.7
 %
 449,113
 104.3
 %

 Loss from operations
 (59,772)
 (12.8)
 %
 (96,246)
 (22.3)
 %

 Interest income
 27,492
 5.9
 %
 22,101
 5.1
 %

 Interest expense
 (9,258)
 (2.0)
 %
 (6,500)
 (1.5)
 %

 Gain on partial extinguishment of convertible senior notes
 —
 —
 %
 3,699
 0.9
 %

 Other expense, net
 (215)
 —
 %
 (433)
 (0.1)
 %

 Loss before (provision for) benefit from income taxes
 (41,753)
 (8.9)
 %
 (77,379)
 (18.0)
 %

 (Provision for) benefit from income taxes
 (1,783)
 (0.4)
 %
 —
 %

 Net loss
 $
 (43,536)
 (9.3)
 %
 $
 (77,367)
 (18.0)
 %

 Net loss attributable to redeemable non-controlling interest
 (801)
 (0.2)
 %
 (2,178)
 —
 %

 $
 (42,735)
 (9.1)
 %
 $
 (75,189)
 (17.5)
 %

 Less: Adjustment attributable to redeemable non-controlling interest
 2.5
 %
 6,568
 1.5
 %

 $
 (54,460)
 (11.6)
 %
 $
 (81,757)
 (19.0)
 %

 ______________
 (1) Includes stock-based compensation expense as follows (in thousands):

 2025
 2024

 Cost of revenue
 $
 5,984
 $
 7,586

 Research and development
 44,691
 44,800

 Sales and marketing
 31,185
 30,345

 General and administrative
 44,350
 44,421

 Total
 $
 $

 We generate revenue primarily from cloud-hosted software subscription fees. We also generate revenue from term-license software subscription fees. Our subscriptions are typically one year in duration but can range from monthly to multi-year. Subscription fees are driven primarily by the number of customers, the number of users per customer, and the level of subscription purchased. We generally invoice customers in advance in annual installments for subscriptions to our software. Revenue related to our cloud-hosted software subscriptions is recognized ratably over the related contractual term beginning on the date that our platform is made available to a customer. For our term-license software subscriptions, we recognize license revenue upon delivery, and software maintenance revenue ratably, typically beginning on the start of the contractual term of the arrangement.

 Due to the low complexity of implementation and integration of our platform with our customers' existing infrastructure, revenue from professional services has been immaterial to date.

 The following sets forth our revenue for the periods indicated (in thousands, except percentages):

 Change

 2025
 2024
 $

 %

 $
 $
 $
 36,800
 %

 Revenue increased primarily due to growth from existing customers, which was driven by an increase in the number of users and upsell of additional products and services.

 Cost of Revenue and Gross Margin

 Cost of revenue primarily consists of expenses related to providing our platform to customers, including personnel expenses for operations and global support, payments to our third-party cloud infrastructure providers for hosting our software, payment processing fees, amortization of capitalized software costs, amortization of acquired developed technology, and allocated overhead costs for facilities, information technology, and other allocated overhead costs. We will continue to invest additional resources in our platform infrastructure and our customer support and success organizations to expand the capability of our platform and ensure that our customers are realizing the full benefit of our offerings. The level and timing of investment in these areas could affect our cost of revenue in the future.

 Gross profit represents revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Our gross margin may fluctuate from period to period as our revenue fluctuates, and as a result of the timing and amount of investments to expand the capacity of our third-party cloud infrastructure providers and our continued efforts to enhance our platform support and customer success teams.

 The following sets forth our cost of revenue and gross margin for the periods indicated (in thousands, except percentages):

 Change

 2025
 2024
 $

 %

 Cost of revenue
 $
 79,665
 $
 77,832
 $
 1,833
 %

 Gross margin
 83.0
 %
 81.9
 %

 Cost of revenue increased primarily due to: (i) an increase of $2.0 million for amortization of capitalized software; (ii) an increase of $1.2 million in outside services spend for the customer service team; (iii) an increase of $1.1 million in hosting, software, and telecom costs; and (iv) an increase of $0.5 million in amortization of acquired intangible assets; offset by (v) a decrease of $2.2 million in personnel costs primarily as a result of changes in the components of compensation plans and a decrease in stock-based compensation compared to the prior year; and (vi) a decrease of $1.0 million in costs to support the business and related infrastructure, which include allocated overhead costs.

 Operating Expenses

 Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. Personnel expenses are the most significant component of operating expenses and consist of salaries, benefits, bonuses, stock-based compensation expense, and sales commissions. Operating expenses also include amortization of acquired intangible assets, acquisition-related expenses, allocated overhead costs for facilities, shared IT related expenses, including depreciation expense, and certain company-wide events and functions.

 The following table sets forth our operating expenses for the periods indicated (in thousands, except percentages):

 Change

 2025
 2024
 $

 %

 Operating expenses:

 Research and development

 $
 141,489
 $
 139,769
 $
 1,720
 1.2
 %

 Sales and marketing

 201,821
 196,769
 5,052
 2.6
 %

 General and administrative

 104,296
 112,575
 (8,279)
 (7.4)
 %

 Total operating expenses
 $
 447,606
 $
 449,113
 $
 (1,507)
 (0.3)
 %

 Research and development: Research and development expenses consist primarily of personnel costs for our engineering, product, and design teams. Additionally, research and development expenses include outside services, depreciation of equipment used in research and development activities, acquisition-related expenses, and allocated overhead costs. We expect that our recurring research and development expenses will increase in dollar value as our business grows.

 The increase in research and development was primarily driven by: (i) an increase of $2.8 million in personnel costs as a result of increased bonuses for research and development employees in the current year; offset by (ii) a decrease of $0.9 million in outside services spend due to higher leverage of internal resources.

 Sales and marketing: Sales and marketing expenses consist primarily of personnel costs, costs of general marketing and promotional activities, travel-related expenses, amortization of acquired intangible assets, allocated overhead costs, and credit loss expense. Sales commissions earned by our sales force that are considered incremental and recoverable costs of obtaining a subscription with a customer are deferred and amortized on a straight-line basis over the expected period of benefit, which we have determined to be four years. We expect that our recurring sales and marketing expenses will generally increase in dollar value and continue to be our largest operating expense for the foreseeable future as we expand our sales and marketing efforts.

 The increase in sales and marketing was primarily due: (i) an increase of $3.0 million in outside consulting services; (ii) an increase of $2.5 million in marketing costs for media campaigns in the current year; (iii) an increase of $1.5 million in training and travel-related costs; and (iv) an increase of $1.4 million in personnel costs, primarily related to an increase in stock-based compensation, commissions, and bonuses; offset by (v) a decrease of $1.8 million in costs to support the business and related infrastructure, which include allocated overhead costs.

 General and administrative: General and administrative expenses consist primarily of personnel costs and outside services fees for finance, legal, human resources, information technology, and other administrative functions. In addition, general and administrative expenses include non-personnel costs, such as legal, accounting, and other professional fees, hardware and software costs, certain tax, license and insurance-related expenses, acquisition-related expenses, and allocated overhead costs. We expect that our recurring general and administrative expenses will increase in dollar value as our business grows. However, we expect that our general and administrative expenses will decrease as a percentage of our revenue over the longer term, as we expect our investments to allow for improved efficiency for future growth in the business.

 The decrease in general and administrative was driven by: (i) a decrease of $8.7 million in costs related to prior year real estate impairment charges that did not recur in the current year; and (ii) a decrease of $1.5 million in costs related to insurance, business taxes, and licenses; offset by (iii) an increase of $1.4 million in personnel costs, primarily driven by increased bonuses related to general and administrative employees.

 Non-Operating Expenses

 The following table sets forth our non-operating income (expenses) for the periods indicated (in thousands, except percentages):

 Change

 2025
 2024
 $

 %

 Interest income
 $
 27,492
 $
 22,101
 $
 5,391
 24.4
 %

 Interest expense
 $
 (9,258)
 $
 (6,500)
 $
 (2,758)
 42.4
 %

 Gain on partial extinguishment of convertible senior notes
 $
 —
 $
 3,699
 $
 (3,699)
 (100.0)
 %

 Other expense, net

 $
 (215)
 $
 (433)
 $
 (50.3)
 %

 (Provision for) benefit from income taxes

 $
 (1,783)
 $
 $
 (1,795)
 (14,958.3)
 %

 Interest income: Interest income consists of accretion income and amortization expense on our available-for-sale investments, income earned on our cash and cash equivalents, and interest earned on our short-term investments which consist of U.S. Treasury securities, commercial paper, corporate debt securities, and U.S. Government agency securities.

 Interest income increased primarily due to accretion on our cash, cash equivalent and investment balances in the current year.

 Interest expense: Interest expense consists primarily of contractual interest expense and amortization of debt issuance costs on our 1.25% Convertible senior notes due 2025 (the "2025 Notes") that were partially extinguished in October 2023 and the contractual interest expense and amortization of debt issuance costs on our 1.50% Convertible Senior Notes due 2028 (the "2028 Notes") that were issued in October 2023.

 Interest expense increased primarily due to contractual interest and amortization of debt issuance costs for the 2028 Notes that were issued in October 2023. The increase was partially offset by a decrease in the amortization of debt issuance costs and interest for the 2025 Notes that were partially extinguished in October 2023 and therefore had less of an impact on the current period.

 Gain on partial extinguishment of convertible senior notes: During the year ended January 31, 2024, we recorded a gain on partial extinguishment of convertible senior notes as a result of the October 2023 partial extinguishment of the 2025 Notes. Refer to Note 9. Debt and Financing Arrangements in the notes to our consolidated financial statements included in this Annual Report on Form 10-K for further discussion.

 Other expense, net: Other expense, net primarily consists of foreign currency transaction gains and losses.

 The change in other income (expense), net was due to fluctuations in foreign currency during the period.

 (Provision for) benefit from income taxes: (Provision for) benefit from income taxes consists primarily of income taxes in certain foreign and U.S. jurisdictions in which we conduct business. We maintain a full valuation allowance on our net federal and state deferred tax assets as we have concluded that it is more likely than not that the deferred tax assets will not be realized for all years presented. The provision may fluctuate to the extent the mix of earnings fluctuates between jurisdictions with different tax rates.

 The change in (provision for) benefit from income taxes was primarily driven by an increase in foreign, federal, and state income taxes.

 Non-GAAP Financial Measures

 In addition to our results determined in accordance with United States generally accepted accounting principles ("U.S. GAAP" or "GAAP"), we believe the following non-GAAP financial measures are useful in evaluating our operating performance. We use the below referenced non-GAAP financial information, collectively, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their U.S. GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with U.S. GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by U.S. GAAP to be recorded in our financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by our management about which expenses are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S. GAAP.

 Specifically, we exclude the following from historical and prospective non-GAAP financial measures, as applicable:

 Stock-based compensation: PagerDuty utilizes stock-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of its stockholders and at long-term retention, rather than to address operational performance for any particular period. As a result, stock-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.

 Employer taxes related to employee stock transactions: PagerDuty views the amount of employer taxes related to its employee stock transactions as an expense that is dependent on its stock price, employee exercise and other award disposition activity, and other factors that are beyond PagerDuty's control. As a result, employer taxes related to employee stock transactions vary for reasons that are generally unrelated to financial and operational performance in any particular period.

 Amortization of acquired intangible assets: PagerDuty views amortization of acquired intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of purchased intangibles is an expense that is not typically affected by operations during any particular period.

 Acquisition-related expenses: PagerDuty views acquisition-related expenses, such as transaction costs, acquisition-related retention payments, and acquisition-related asset impairment, as events that are not necessarily reflective of operational performance during a period. In particular, PagerDuty believes the consideration of measures that exclude such expenses can assist in the comparison of operational performance in different periods which may or may not include such expenses.

 Amortization of debt issuance costs: The imputed interest rates of the Company's convertible senior notes (the "2025 Notes" and the "2028 Notes" or, collectively, the "Notes") was approximately 1.91% for the 2025 Notes and 2.13% for the 2028 Notes. This is a result of the debt issuance costs, which reduce the carrying value of the convertible debt instruments. The debt issuance costs are amortized as interest expense. The expense for the amortization of the debt issuance costs is a non-cash item, and we believe the exclusion of this interest expense will provide for a more useful comparison of our operational performance in different periods.

 Restructuring costs: PagerDuty views restructuring costs, such as employee severance-related costs and real estate impairment costs, as events that are not necessarily reflective of operational performance during a period. In particular, PagerDuty believes the consideration of measures that exclude such expenses can assist in the comparison of operational performance in different periods which may or may not include such expenses.

 Gains (or losses) on partial extinguishment of convertible senior notes: PagerDuty views gains (or losses) on partial extinguishment of debt as events that are not necessarily reflective of operational performance during a period. PagerDuty believes that the consideration of measures that exclude such gain (or loss) impact can assist in the comparison of operational performance in different periods which may or may not include such gains (or losses).

 Adjustment attributable to redeemable non-controlling interest: PagerDuty adjusts the value of redeemable non-controlling interest of its joint venture PagerDuty K.K. according to the operating agreement. PagerDuty believes this adjustment is not reflective of operational performance during a period and exclusion of such adjustments can assist in comparison of operational performance in different periods.

 Income tax effects and adjustments: For fiscal 2025, PagerDuty used a projected non-GAAP tax rate of 23%. PagerDuty uses a projected non-GAAP tax rate in order to provide better consistency across the interim reporting periods by eliminating the impact of non-recurring and period specific items, which can vary in size and frequency. PagerDuty's estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that PagerDuty believes materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenue and expenses and other significant events.

 Non-GAAP gross profit and non-GAAP gross margin

 We define non-GAAP gross profit as gross profit excluding the following expenses typically included in cost of revenue: stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, and restructuring costs. We define non-GAAP gross margin as non-GAAP gross profit as a percentage of revenue.

 The following table presents the calculation of non-GAAP gross profit and non-GAAP gross margin for the periods indicated (in thousands):

 2025
 2024
 2023

 Gross profit
 $
 387,834
 $
 352,867
 $
 300,359

 Add:

 5,984
 7,586
 6,827

 Employer taxes related to employee stock transactions

 Amortization of acquired intangible assets
 9,075
 8,614
 7,401

 Restructuring costs
 (2)

 Non-GAAP gross profit
 $
 403,053
 $
 369,403
 $
 315,107

 $
 $
 $
 370,793

 Gross margin
 83.0
 %
 81.9
 %
 81.0
 %

 Non-GAAP gross margin
 86.2
 %
 85.8
 %
 85.0
 %

 Non-GAAP operating income and non-GAAP operating margin

 We define non-GAAP operating income as loss from operations excluding stock-based compensation expense, employer taxes related to employee stock transactions, acquisition-related expenses, amortization of acquired intangible assets, and restructuring costs, which are not necessarily reflective of operational performance during a given period. We define non-GAAP operating margin as non-GAAP operating income as a percentage of revenue.

 The following table presents the calculation of non-GAAP operating income and non-GAAP operating margin for the periods indicated (in thousands):

 2025
 2024
 2023

 Loss from operations
 $
 (59,772)
 $
 (96,246)
 $
 (129,377)

 Add:

 109,907

 Employer taxes related to employee stock transactions
 2,796
 3,498
 3,096

 Acquisition-related expenses
 1,800
 4,559

 Amortization of acquired intangible assets
 11,750
 11,510
 10,237

 Restructuring costs
 8,677
 5,035

 Non-GAAP operating income
 $
 82,703
 $
 56,391
 $
 3,457

 $
 $
 $
 370,793

 Operating margin
 (12.8)
 %
 (22.3)
 %
 (34.9)
 %

 Non-GAAP operating margin
 17.7
 %
 13.1
 %
 0.9
 %

 Non-GAAP net income attributable to PagerDuty, Inc. common stockholders

 We define non-GAAP net income attributable to PagerDuty, Inc. common stockholders as net loss attributable to PagerDuty, Inc. common stockholders excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of debt issuance costs, amortization of acquired intangible assets, acquisition-related expenses, restructuring costs, gain on extinguishment of convertible senior notes, adjustment attributable to redeemable non-controlling interest, and income tax adjustments, which are not necessarily reflective of operational performance during a given period.

 The following table presents the calculation of non-GAAP net income attributable to PagerDuty, Inc. common stockholders for the periods indicated (in thousands):

 2025
 2024
 2023

 $
 (54,460)
 $
 (81,757)
 $
 (128,423)

 Add:

 109,907

 Employer taxes related to employee stock transactions
 2,796
 3,498
 3,096

 Amortization of debt issuance costs
 2,629
 2,078
 1,839

 Amortization of acquired intangible assets
 11,750
 11,510
 10,237

 Acquisition-related expenses
 1,800
 4,559

 Restructuring costs
 8,677
 5,035

 Gain on extinguishment of convertible senior notes
 —
 (3,699)
 —

 Adjustment attributable to redeemable non-controlling interest
 6,568
 —

 Income tax effects and adjustments
 (21,989)
 (3,273)
 (2,556)

 Non-GAAP net income attributable to PagerDuty, Inc. common stockholders
 $
 80,380
 $
 72,554
 $
 3,694

 Free cash flow

 We define free cash flow as net cash provided by operating activities, less cash used for purchases of property and equipment and capitalization of software costs. In addition to the reasons stated above, we believe that free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash in excess of our capital investments in property and equipment in order to enhance the strength of our balance sheet and further invest in our business and potential strategic initiatives. A limitation of the utility of free cash flow as a measure of our liquidity is that it does not represent the total increase or decrease in our cash balance for the period. We use free cash flow in conjunction with traditional U.S. GAAP measures as part of our overall assessment of our liquidity, including the preparation of our annual operating budget and quarterly forecasts and to evaluate the effectiveness of our business strategies. There are a number of limitations related to the use of free cash flow as compared to net cash provided by operating activities, including that free cash flow includes capital expenditures, the benefits of which are realized in periods subsequent to those when expenditures are made.

 The following table presents the calculation of free cash flow for the periods indicated (in thousands):

 2025
 2024
 2023

 Net cash provided by operating activities
 $
 117,891
 $
 71,974
 $
 16,980

 Purchases of property and equipment
 (2,791)
 (2,164)
 (4,637)

 Capitalization of software costs
 (6,686)
 (5,384)
 (3,836)

 Free cash flow
 $
 108,414
 $
 64,426
 $
 8,507

 Net cash used in investing activities
 $
 (19,968)
 $
 (30,525)
 $
 (86,165)

 Net cash (used in) provided by financing activities
 $
 (116,138)
 $
 51,600
 $
 (6,413)

 Liquidity and Capital Resources

 Sources and Uses of Liquidity

 As of January 31, 2025, our principal sources of liquidity were cash and cash equivalents and investments totaling $570.8 million. We believe that our existing cash and cash equivalents, investments, and net cash generated from our operating activities will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. Since inception, we have financed operations primarily through sales of our cloud-hosted software subscriptions, net proceeds received from sales of equity securities, and the issuance of our 2025 Notes and 2028 Notes (collectively, the "Notes"). We believe we will meet long-term expected future cash requirements and obligations through a combination of cash flows from operating activities and available cash and short-term investment balances.

 Debt and Financing Arrangements

 Refer to Note 9, Debt and Financing Arrangements, in the notes to our consolidated financial statements included in this Annual Report on Form 10-K for discussion of our debt arrangements, including the timing of expected maturity of such arrangements.

 Deferred Revenue

 A significant majority of our customers pay in advance for our cloud-hosted and term-license software subscriptions. Therefore, a substantial source of our cash is from our deferred revenue, which is included in the liabilities section of our consolidated balance sheet. Deferred revenue consists of the unearned portion of customer billings, which is recognized as revenue in accordance with our revenue recognition policy. As of January 31, 2025, we had deferred revenue of $245.8 million, of which $243.3 million was recorded as a current liability and expected to be recorded as revenue in the next 12 months, provided all other revenue recognition criteria are met.

 Share Repurchase Program

 In May 2024, our Board of Directors approved a share repurchase program (the "2024 Share Repurchase Program") for the repurchase of shares of our common stock in an aggregate amount of up to $100.0 million. The 2024 Share Repurchase Program did not obligate us to acquire a specified number of shares, and could be suspended, modified, or terminated at any time, without prior notice. During the year ended January 31, 2025, the Company repurchased a total of 5,223,071 shares of common stock through open market purchases at an average per share price of $19.15 for a total repurchase price of $100.0 million. During the year ended January 31, 2025, these shares were retired.

 In March 2025, our Board of Directors approved a share repurchase program (the "2025 Share Repurchase Program") for the repurchase of shares of our common stock in an aggregate amount of up to $150.0 million. The 2025 Share Repurchase Program replaces the 2024 Share Repurchase Program, which was completed in November 2024. The 2025 Share Repurchase Program does not obligate us to acquire a specified number of shares, and may be suspended, modified, or terminated at any time, without prior notice. The repurchases are expected to be executed from time to time through March 13, 2027, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions, or other legally permissible means, including through Rule 10b5-1 plans.

 Future Contractual Obligations

 Our estimated future obligations as of January 31, 2025 include both current and long-term obligations. Our debt obligations total $450.7 million, of which $57.4 million is short-term, and the remainder is long-term. Additionally, we had $1.8 million of irrevocable standby letters of credit outstanding which were fully collateralized by our restricted cash, all of which represents a long-term cash obligation. Under our operating leases, we had a current obligation of $3.3 million and a long-term obligation of $9.6 million. Operating lease obligations primarily represent the initial contracted term for leases that have commenced as of January 31, 2025, not including any future optional renewal periods. Additionally, as of January 31, 2025, we had non-cancellable purchase commitments with certain service providers totaling approximately $72.0 million. Refer to Note 10. Commitments and Contingencies for additional information regarding our purchase commitments.

 Cash Flow Information

 The following table shows a summary of our cash flows for the periods indicated (in thousands):

 2025
 2024

 Net cash provided by operating activities
 $
 117,891
 $
 71,974

 Net cash used in investing activities
 (19,968)
 (30,525)

 Net cash (used in) provided by financing activities
 (116,138)
 51,600

 Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash
 (124)
 (401)

 Net change in cash, cash equivalents, and restricted cash
 $
 (18,339)
 $
 92,648

 Operating Activities

 Net cash provided by operating activities improved, primarily due to improvements in our operating loss performance due to the 9% increase in revenue. Cash provided by operating activities is subject to variability period-over-period as a result of timing differences, including with respect to the collection of receivables and payments of accounts payable, and other items.

 Investing Activities

 Net cash used in investing activities decreased, primarily due to a decrease in cash outflows from the prior year acquisition of Jeli, Inc. of $24.1 million, along with a decrease in cash inflows related to proceeds from maturities of available-for-sale investments of $16.3 million.

 Financing Activities

 Net cash used in financing activities increased, primarily as a result of an increase in repurchases of common stock and net cash inflow activity related to the conversion of our 2025 Notes which occurred during the year ended January 31, 2024 and did not recur during the year ended January 31, 2025.

 Off-Balance Sheet Arrangements

 Indemnification Agreements

 See Note 10. Commitments and Contingencies, in the notes to our consolidated financial statements included in this Annual Report on Form 10-K for a description of our indemnification agreements.

 Letters of Credit

 We had $1.8 million of irrevocable standby letters of credit outstanding as of January 31, 2025. Letters of credit are primarily used as a form of security deposits for the spaces we lease.

 Effect of Exchange Rates

 Our changes in cash can be impacted by the effect of fluctuating exchange rates. Foreign exchange had a negative effect on cash in the year ended January 31, 2024, decreasing our total cash balance by $0.4 million, and a negative effect on cash in the year ended January 31, 2025, decreasing our total cash balance by $0.1 million.

 Critical Accounting Estimates

 Our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K are prepared in accordance with U.S. GAAP. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected. We believe that the accounting policies described below involve a greater degree of judgment and complexity. Accordingly, these are the estimates we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations.

 Revenue Recognition

 We enter into contracts with our customers that may include promises to transfer multiple services, software licenses, support, and professional services. A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct. Determining whether products and services in agreements with non-standard terms are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment.

 Deferred Contract Costs

 Deferred contract costs include sales commissions earned by our sales force which are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial contracts are deferred and then amortized on a straight-line basis over a period of benefit, determined to be four years. Significant judgment is required in arriving at this period of benefit. We determined the period of benefit by taking into consideration our customer contracts, technology, and other factors.

 Business Combinations and Valuation of Intangible Assets

 We apply the acquisition method of accounting for business combinations. Under this method of accounting, all assets acquired and liabilities assumed are recorded at their respective fair values at the date of the acquisition. Determining the fair value of assets acquired and liabilities assumed requires management's judgment and often involves the use of significant estimates and assumptions. These estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the cost savings expected to be derived from acquiring an asset. These estimates are inherently uncertain and unpredictable.

 Acquired intangible assets consist of identifiable intangible assets, including developed technology, customer relationships, and trade name resulting from our acquisition. Acquired intangible assets are recorded at fair value on the date of acquisition and amortized over their estimated useful lives. The carrying amounts of our acquired intangible assets are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated.

 Stock-Based Compensation – Market-Based Performance Stock Units

 Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as compensation expense generally on a straight-line basis over the requisite service period of the award, which is typically the vesting period.

 We occasionally grant market-based performance stock unit ("PSU") awards, for which vesting is dependent upon the relative growth of the per share price of the Company's common stock as compared to the S&P Software & Services Select Index over the one-year performance period. The fair value for these awards is measured on the grant date based on estimated projections of our stock price over the performance period. These estimates are made using a Monte Carlo simulation, which models multiple stock price paths of our common stock and that of the peer group to evaluate and determine our ultimate expected relative growth of the per share price of the Company's common stock. Compensation expense for the PSUs with market conditions is recorded over the vesting period under the graded-vesting attribution method, and is recorded regardless of whether, and the extent to which, the market condition is ultimately satisfied.

 Recent Accounting Pronouncements

 See Note 2, Summary of Significant Accounting Policies in the notes to our consolidated financial statements included in this Annual Report on Form 10-K for a description of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.

 Item 7A. Quantitative and Qualitative Disclosures About Market Risk

 Interest Rate Risk

 As of January 31, 2025, we had cash, cash equivalents and investments totaling $570.8 million, invested in money market funds, U.S. Treasury securities, commercial paper, and corporate debt securities. Our cash and cash equivalents are held for working capital purposes. Our investments are made for capital preservation purposes. We do not enter into investments for trading or speculative purposes.

 Our investments classified as available-for-sale investments, including those with stated maturities beyond 12 months, are classified as short-term based on their highly liquid nature and because they represent the investment of cash that is available for current operations. In addition, we may sell these investments at any time for use in its current operations or for other purposes, even prior to maturity. As of January 31, 2025, our available-for-sale investments are recorded as current on our consolidated balance sheets.

 As of January 31, 2025, we had $57.5 million and $402.5 million aggregate principal outstanding of 2025 Notes and 2028 Notes, respectively. The 2025 Notes and 2028 Notes have a fixed annual interest rate of 1.25% 1.50%, respectively; accordingly, we do not have economic interest rate exposure on the Notes. However, the fair market value of the Notes is exposed to interest rate risk. Generally, the fair market value of the fixed interest rate of the Notes will increase as interest rates fall and decrease as interest rates rise. In addition, the fair market value of the Notes fluctuates when the market price of our common stock fluctuates. The fair market value was determined based on the quoted mid price of the Notes in an over-the-counter market on the last trading day of the reporting period. Refer to Note 5. Fair Value Measurements in the notes to our consolidated financial statements included elsewhere in this Form 10-K for more information.

 Changes in interest rates impact the fair value of marketable debt securities. As of January 31, 2025, a hypothetical 10% relative change in interest rates would not have a material impact on our consolidated financial statements.

 Foreign Currency Exchange Risk

 Our reporting currency and the functional currency of our wholly-owned foreign subsidiaries is the U.S. dollar. Primarily all of our sales are denominated in U.S. dollars, and therefore substantially all of our revenue is not currently subject to significant foreign currency risk. Our operating expenses are denominated in the currencies of the countries in which our operations are located, which are primarily in the United States, Canada, the United Kingdom, Australia, Switzerland, Japan, Chile, and Portugal. Our consolidated results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. To date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments, although we may choose to do so in the future. We do not believe that a hypothetical 10% increase or decrease in the relative value of the U.S. dollar to other currencies would have a material effect on our operating results.

 Item 8. Financial Statements and Supplementary Data

 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 Page

 Report of Independent Registered Public Accounting Firm (PCAOB ID No. 238)

 Report of Predecessor Auditor (PCAOB ID No. 42)

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Comprehensive Loss

 Consolidated Statements of Stockholders' Equity

 Consolidated Statements of Cash Flows

 Notes to the Consolidated Financial Statements

 Report of Independent Registered Public Accounting Firm

 To the Board of Directors and Stockholders of PagerDuty, Inc.

 Opinions on the Financial Statements and Internal Control over Financial Reporting

 We have audited the accompanying consolidated balance sheet of PagerDuty, Inc. and its subsidiaries (the "Company") as of January 31, 2025, and the related consolidated statements of operations, of comprehensive loss, of stockholders' equity and of cash flows for the year then ended, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of January 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

 In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 31, 2025, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

 Basis for Opinions

 The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company's consolidated financial statements and on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

 Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

 Definition and Limitations of Internal Control over Financial Reporting

 A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 Critical Audit Matters

 The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

 Revenue recognition – cloud-hosted software subscription fees

 As described in Note 2 to the consolidated financial statements, the Company generates revenue primarily from cloud-hosted software subscription fees. Revenue related to the Company's cloud-hosted software subscriptions is recognized ratably over the related contractual term beginning on the date that the Company's platform is made available to a customer. Revenue related to the cloud-hosted software subscription fees is a significant portion of the Company's total revenue of $467.5 million for the year ended January 31, 2025.

 The principal consideration for our determination that performing procedures relating to cloud-hosted software subscription fees revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company's revenue recognition.

 Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over recording cloud-hosted software subscription fees ratably over the contractual term. These procedures also included, among others (i) for a sample of revenue transactions, a) testing management's identification and evaluation of terms and conditions by examining customer contracts, and b) testing the revenue recognized by obtaining and inspecting source documents such as customer order forms, master service agreements, invoices, proof of delivery, and cash receipts, and recalculating revenue recognized, (ii) testing a sample of credit memos and evaluating the impact on revenue recognized, and (iii) confirming a sample of outstanding customer invoice balances as of January 31, 2025 and, for confirmations not returned, obtaining and inspecting source documents, such as customer order forms, master service agreements, invoices, proof of delivery, and subsequent cash receipts.

 /s/
 PricewaterhouseCoopers LLP

 San Francisco, California

 We have served as the Company's auditor since 2024.

 Report of Independent Registered Public Accounting Firm

 To the Stockholders and the Board of Directors of PagerDuty, Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated balance sheet of PagerDuty, Inc. (the Company) as of January 31, 2024, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for each of the two years in the period ended January 31, 2024, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 31, 2024, and the results of its operations and its cash flows for each of the two years in the period ended January 31, 2024, in conformity with U.S. generally accepted accounting principles.

 Basis for Opinion

 These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 /s/

 Ernst & Young LLP

 We served as the Company's auditor from 2015 to 2024.

 San Francisco, California

 March 15, 2024

 CONSOLIDATED BALANCE SHEETS
 (in thousands)

 January 31, 2024

 Assets

 Current assets:

 Cash and cash equivalents
 $
 346,460
 $
 363,011

 Investments

 Accounts receivable, net of allowance for credit losses of $ 1,103 and $ 1,382 as of January 31, 2025 and January 31, 2024, respectively

 107,350
 100,413

 Deferred contract costs, current
 19,787
 19,502

 Prepaid expenses and other current assets
 13,757
 12,094

 Total current assets
 711,720
 703,198

 Property and equipment, net
 21,335
 17,632

 Deferred contract costs, non-current
 25,279
 25,118

 Lease right-of-use assets
 6,806
 3,789

 Goodwill
 137,401
 137,401

 Intangible assets, net
 20,865
 32,616

 Other assets
 3,860
 5,552

 Total assets
 $
 927,266
 $
 925,306

 Liabilities, redeemable non-controlling interest, and stockholders' equity

 Current liabilities:

 Accounts payable
 $
 7,329
 $
 6,242

 Accrued expenses and other current liabilities
 20,322
 15,472

 Accrued compensation
 37,505
 30,239

 Deferred revenue, current
 243,269
 223,522

 Lease liabilities, current
 3,307
 6,180

 Convertible senior notes, net, current
 57,426
 —

 Total current liabilities
 369,158
 281,655

 Convertible senior notes, net, non-current
 393,282
 448,030

 Deferred revenue, non-current
 2,483
 4,639

 Lease liabilities, non-current
 9,637
 6,809

 Other liabilities
 4,661
 5,280

 Total liabilities
 779,221
 746,413

 Commitments and contingencies (Note 10)

 Redeemable non-controlling interest (Note 3)

 18,217
 7,293

 Stockholders' equity

 Common stock
 —
 —

 Additional paid-in-capital
 725,483
 774,768

 Accumulated other comprehensive loss
 ( 485)
 ( 733)

 Accumulated deficit
 ( 595,170)
 ( 552,435)

 Treasury Stock
 —

 Total stockholders' equity
 129,828
 171,600

 Total liabilities, redeemable non-controlling interest, and stockholders' equity
 $
 927,266
 $
 925,306

 CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per share data)

 2025
 2024
 2023

 $
 $
 $
 370,793

 Cost of revenue
 79,665
 77,832
 70,434

 Gross profit
 387,834
 352,867
 300,359

 Operating expenses:

 Research and development
 141,489
 139,769
 134,876

 Sales and marketing
 201,821
 196,769
 195,622

 General and administrative
 104,296
 112,575
 99,238

 Total operating expenses
 447,606
 449,113
 429,736

 Loss from operations
 ( 59,772)
 ( 96,246)
 ( 129,377)

 Interest income
 27,492
 22,101
 5,383

 Interest expense
 ( 9,258)
 ( 6,500)
 ( 5,433)

 Gain on partial extinguishment of convertible senior notes
 —
 3,699
 —

 Other expense, net
 ( 215)
 ( 433)
 ( 637)

 Loss before (provision for) benefit from income taxes
 ( 41,753)
 ( 77,379)
 ( 130,064)

 (Provision for) benefit from income taxes
 ( 1,783)

 Net loss
 $
 ( 43,536)
 $
 ( 77,367)
 $
 ( 129,225)

 Net loss attributable to redeemable non-controlling interest
 ( 801)
 ( 2,178)
 ( 802)

 $
 ( 42,735)
 $
 ( 75,189)
 $

 Less: Adjustment attributable to redeemable non-controlling interest
 6,568
 —

 $
 ( 54,460)
 $
 ( 81,757)
 $

 Weighted average shares used in calculating net loss per share, basic and diluted
 92,000
 92,341
 88,721

 Net loss per share, basic and diluted, attributable to PagerDuty, Inc. common stockholders
 $
 ( 0.59)
 $
 ( 0.89)
 $
 ( 1.45)

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
 (in thousands)

 2025
 2024
 2023

 Net loss
 $
 ( 43,536)
 $
 ( 77,367)
 $
 ( 129,225)

 Unrealized gain (loss) on investments
 1,341
 ( 772)

 Foreign currency translation adjustments
 ( 482)
 ( 151)

 Total comprehensive loss
 $
 ( 43,288)
 $
 ( 76,508)
 $
 ( 130,148)

 Less: comprehensive loss attributable to redeemable non-controlling interest

 Net loss attributable to redeemable non-controlling interest
 ( 801)
 ( 2,178)
 ( 802)

 Foreign currency translation adjustments attributable to redeemable non-controlling interest
 —

 Comprehensive loss attributable to redeemable non-controlling interest
 ( 801)
 ( 2,164)
 ( 800)

 Comprehensive loss attributable to PagerDuty, Inc.
 $
 ( 42,487)
 $
 ( 74,344)
 $
 ( 129,348)

 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
 (in thousands, except share data)

 Common Stock
 Additional
Paid-in
Capital
 Accumulated Other Comprehensive Loss
 Accumulated
Deficit
 Treasury Stock
 Total
Stockholders'
Equity

 Shares
 Amount
 Shares
 Amount

 Balance as of January 31, 2022
 86,758,380
 $
 —
 $
 616,467
 $
 ( 669)
 $
 ( 348,823)
 —
 $
 —
 $
 266,975

 Issuance of common stock upon exercise of stock options
 2,093,724
 —
 10,917
 —
 —
 —
 —
 10,917

 Vesting of restricted stock units and performance stock units, net of employee payroll taxes
 1,768,163
 —
 ( 28,677)
 —
 —
 —
 —
 ( 28,677)

 Shares issued related to asset acquisition
 62,972
 —
 —
 —
 —
 —
 —
 —

 Issuance of common stock in connection with the employee stock purchase plan
 495,432
 —
 9,875
 —
 —
 —
 —
 9,875

 Other comprehensive loss
 —
 —
 —
 ( 923)
 —
 —
 —
 ( 923)

 —
 —
 111,234
 —
 —
 —
 —
 111,234

 —
 —
 —
 —
 —
 —

 Balance as of January 31, 2023
 91,178,671
 $
 —
 $
 719,816
 $
 ( 1,592)
 $
 ( 477,246)
 —
 $
 —
 $
 240,978

 Issuance of common stock upon exercise of stock options
 1,160,809
 —
 9,435
 —
 —
 —
 —
 9,435

 Vesting of restricted stock units and performance stock units, net of employee payroll taxes
 2,192,556
 —
 ( 32,400)
 —
 —
 —
 —
 ( 32,400)

 Fair value of replacement stock options attributable to pre-combination service related to business combination
 —
 —
 —
 —
 —
 —

 Issuance of common stock in connection with the employee stock purchase plan
 536,151
 —
 10,294
 —
 —
 —
 —
 10,294

 Purchases of capped calls related to convertible senior notes
 —
 —
 ( 55,102)
 —
 —
 —
 —
 ( 55,102)

 Repurchases of common stock
 —
 —
 —
 —
 —
 ( 2,331,002)

 Other comprehensive income
 —
 —
 —
 —
 —
 —

 —
 —
 128,799
 —
 —
 —
 —
 128,799

 Adjustment to redeemable non-controlling interest
 —
 —
 ( 6,568)
 —
 —
 —
 —
 ( 6,568)

 —
 —
 —
 —
 ( 75,189)
 —
 —
 ( 75,189)

 Balance as of January 31, 2024
 95,068,187
 $
 —
 $
 774,768
 $
 ( 733)
 $
 ( 552,435)
 ( 2,331,002)
 $
 $
 171,600

 Issuance of common stock upon exercise of stock options
 620,106
 —
 4,339
 —
 —
 —
 —
 4,339

 Vesting of restricted stock units and performance stock units, net of employee payroll taxes
 2,445,924
 —
 ( 28,961)
 —
 —
 —
 —
 ( 28,961)

 Issuance of common stock in connection with employee stock purchase plan
 502,460
 —
 8,991
 —
 —
 —
 —
 8,991

 Repurchases of common stock
 —
 —
 —
 —
 —
 ( 5,223,071)
 ( 100,104)
 ( 100,104)

 Retirement of treasury stock
 ( 7,554,073)
 —
 ( 150,104)
 —
 —
 7,554,073
 150,104
 —

 Excise tax on repurchases of common stock
 —
 —
 ( 300)
 —
 —
 —
 —
 ( 300)

 Other comprehensive income
 —
 —
 —
 —
 —
 —

 —
 —
 128,475
 —
 —
 —
 —
 128,475

 Adjustment to redeemable non-controlling interest
 —
 —
 ( 11,725)
 —
 —
 —
 —
 ( 11,725)

 —
 —
 —
 —
 ( 42,735)
 —
 —
 ( 42,735)

 Balance as of January 31, 2025
 91,082,604
 $
 —
 $
 725,483
 $
 ( 485)
 $
 ( 595,170)
 —
 $
 —
 $
 129,828

 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)

 2025
 2024
 2023

 Cash flows from operating activities:

 $
 ( 54,460)
 $
 ( 81,757)
 $

 Net loss and adjustment attributable to non-controlling interest
 10,924
 4,390
 ( 802)

 Net loss
 ( 43,536)
 ( 77,367)
 ( 129,225)

 Adjustments to reconcile net loss to net cash provided by operating activities:

 Depreciation and amortization
 20,603
 20,153
 17,429

 Amortization of deferred contract costs
 22,008
 20,568
 19,247

 Amortization of debt issuance costs
 2,629
 2,078
 1,839

 Gain on extinguishment of convertible senior notes
 —
 ( 3,699)
 —

 109,907

 Non-cash lease expense
 3,053
 4,439
 4,073

 Impairment of property and equipment, net and right-of-use assets
 —
 8,368
 —

 Tax benefit related to release of valuation allowance
 —
 —
 ( 1,330)

 Other
 ( 4,461)
 ( 3,223)
 1,841

 Changes in operating assets and liabilities:

 Accounts receivable
 ( 8,042)
 ( 10,662)
 ( 16,586)

 Deferred contract costs
 ( 22,459)
 ( 18,799)
 ( 22,805)

 Prepaid expenses and other assets
 ( 1,930)
 —
 ( 2,843)

 Accounts payable
 1,140
 ( 1,453)
 ( 1,473)

 Accrued expenses and other liabilities
 4,184
 4,145
 ( 1,444)

 Accrued compensation
 6,912
 ( 11,825)
 6,147

 Deferred revenue
 17,695
 18,073
 37,971

 Lease liabilities
 ( 6,115)
 ( 5,974)
 ( 5,768)

 Net cash provided by operating activities
 117,891
 71,974
 16,980

 Cash flows from investing activities:

 Purchases of property and equipment
 ( 2,791)
 ( 2,164)
 ( 4,637)

 Capitalized software costs
 ( 6,686)
 ( 5,384)
 ( 3,836)

 Cash flows related to business combination
 —
 ( 24,071)
 ( 66,262)

 Cash flows related to asset acquisition
 —
 —
 ( 1,845)

 Purchases of available-for-sale investments
 ( 214,714)
 ( 216,970)
 ( 212,210)

 Proceeds from maturities of available-for-sale investments
 201,986
 218,264
 202,625

 Proceeds from sales of available-for-sale investments
 2,237
 —
 —

 Purchases of non-marketable equity investments
 —
 ( 200)
 —

 Net cash used in investing activities
 ( 19,968)
 ( 30,525)
 ( 86,165)

 Cash flows from financing activities:

 Proceeds from issuance of convertible senior notes, net of issuance costs
 ( 403)
 390,831
 —

 Purchases of capped calls related to convertible senior notes
 —
 ( 55,102)
 —

 Repurchases of convertible senior notes
 —
 ( 223,675)
 —

 Investment from redeemable non-controlling interest holder
 —
 1,781
 1,908

 Repurchases of common stock
 ( 100,104)
 —

 Proceeds from employee stock purchase plan
 8,991
 10,294
 9,875

 Proceeds from issuance of common stock upon exercise of stock options
 4,339
 9,871
 10,481

 Employee payroll taxes paid related to net share settlement of restricted stock units
 ( 28,961)
 ( 32,400)
 ( 28,677)

 Net cash (used in) provided by financing activities
 ( 116,138)
 51,600
 ( 6,413)

 Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash
 ( 124)
 ( 401)
 ( 168)

 Net change in cash, cash equivalents, and restricted cash
 ( 18,339)
 92,648
 ( 75,766)

 Cash, cash equivalents, and restricted cash at beginning of year
 366,667
 274,019
 349,785

 Cash, cash equivalents, and restricted cash at end of year
 $
 348,328
 $
 366,667
 $
 274,019

 CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
 (in thousands)

 Year Ended January 31,

 2025
 2024
 2023

 Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets:

 Cash and cash equivalents
 $
 346,460
 $
 363,011
 $
 274,019

 Restricted cash in other long-term assets
 1,868
 3,656
 —

 Total cash, cash equivalents, and restricted cash
 $
 348,328
 $
 366,667
 $
 274,019

 Supplemental cash flow data:

 Cash paid for interest
 $
 6,790
 $
 2,971
 $
 3,594

 Cash paid for taxes
 $
 $
 $

 Non-cash investing and financing activities:

 Purchase of property and equipment, accrued but not yet paid
 $
 $
 $

 Issuance costs included in accrued expenses
 $
 —
 $
 $
 —

 Stock-based compensation capitalized in internal use software
 $
 2,620
 $
 1,647
 $
 1,320

 Bonuses capitalized in internal use software
 $
 $
 $

 Receivables for cash in-transit on stock options
 $
 —
 $
 —
 $

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 Note 1. Description of Business and Basis of Presentation

 Description of Business

 PagerDuty, Inc. was incorporated under the laws of the state of Delaware in May 2010.

 PagerDuty, Inc., together with its wholly-owned subsidiaries and subsidiaries in which PagerDuty, Inc. holds a controlling interest (collectively, the "Company"), provides a digital operations management platform that manages urgent and mission-critical work for a modern, digital business (the "PagerDuty Platform"). The PagerDuty Platform collects data and digital signals from virtually any software-enabled system or device and leverages powerful machine learning to correlate, process, and predict opportunities and issues. Using incident response, event management, and automation, the Company brings together the right people with the right information so they can resolve issues and act on opportunities in minutes or seconds from wherever they are.

 Basis of Presentation

 The accompanying consolidated financial statements have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("U.S. GAAP" or "GAAP"), and applicable rules and regulations of the Securities and Exchange Commission ("SEC"). The consolidated financial statements include the results of PagerDuty, Inc., its wholly-owned subsidiaries, and subsidiaries in which the Company holds a controlling interest. All intercompany balances and transactions have been eliminated in consolidation. The Company's fiscal year ends on January 31. References to fiscal 2025 refer to the fiscal year ended January 31, 2025.

 Use of Estimates

 The preparation of financial statements in conformity with GAAP requires management to make, on an ongoing basis, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. The Company's most significant estimates and judgments involve the period of benefit for amortizing deferred contract costs, the determination of the fair value of acquired assets and assumed liabilities, stock-based compensation, redemption value of redeemable non-controlling interests, and estimates related to the Company's revenue recognition, such as the assessment of performance obligations in the Company's revenue arrangements and the fair value assigned to each performance obligation, among others. Management bases its estimates on historical experience and on various other assumptions which management believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

 Note 2. Summary of Significant Accounting Policies

 Segment Information

 The Company manages its operations and allocates resources as one operating and reportable segment at the consolidated level. The Company's chief operating decision maker ("CODM") is its chief executive officer. The CODM uses consolidated net loss to measure segment profit or loss, allocate resources, make operating decisions, and assess performance through monitoring and evaluation of forecast versus actual results. Further, the CODM reviews and utilizes functional expenses (cost of revenue, sales and marketing, research and development, and general and administrative) at the consolidated level to manage the Company's operations. Net loss is the Company's primary measure of profit or loss. Significant expenses within net loss include cost of revenue, research and development, sales and marketing, and general and administrative, which each are separately presented on the consolidated statements of operations. Stock-based compensation expense is also a significant expense within net loss. Refer to Note 12. Common Stock and Stockholders' Equity for additional information about the Company's stock-based compensation expense. Other segment items include interest income, interest expense, gain on partial extinguishment of convertible senior notes, other expense, net, and (provision for) benefit from income taxes on the consolidated statements of operations. Refer to Note 15. Geographic Information for information regarding the Company's long-lived assets and revenue by geography.

 Revenue Recognition

 The Company generates revenue primarily from cloud-hosted software subscription fees. The Company also generates revenue from term-license software subscription fees and professional services. Revenue recognized from professional services has historically been immaterial. Revenue is recognized when control of the license or service is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenue is recognized net of taxes invoiced to customers, which are subsequently remitted to governmental authorities.

 The Company accounts for revenue contracts with customers by applying the requirements of Accounting Standards Codification ("ASC") 606, Revenue Recognition ("ASC 606"), which includes the following steps:

 • Identification of the contract, or contracts, with a customer.
 • Identification of the performance obligations in the contract.
 • Determination of the transaction price.
 • Allocation of the transaction price to the performance obligations in the contract.
 • Recognition of revenue when, or as, the Company satisfies a performance obligation.

 Cloud-hosted software subscriptions: The Company's cloud-hosted software subscriptions allow customers to use its cloud-hosted software over the contract period without taking possession of the software. The Company's cloud-hosted software subscription agreements generally have monthly or annual contractual terms. Revenue related to the Company's cloud-hosted software subscriptions is recognized ratably over the related contractual term beginning on the date that the Company's platform is made available to a customer. Access to the platform represents a series of distinct services as the Company continually provides access to, and fulfills its obligation to, the end customer over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. The Company recognizes revenue ratably because the customer receives and consumes the benefits of the platform throughout the contract period.

 Term-license software subscriptions: The Company's term-license software subscriptions provide both an obligation to provide access to its on-premise software, which includes both open-source and proprietary features, as well as an obligation to provide support and maintenance. The Company's term-license software subscription agreements generally have annual contractual terms. The Company accounts for the license to the software and support as two separate performance obligations. As the open-source software is publicly available at no cost to the customer, the Company has determined that there is no value to be assigned to the open-source software in the term-license software subscription arrangements. The proprietary software license represents a promise to provide a license to use functional intellectual property that is recognized at a point in time on the date access to the software is made available to the customer and the term-license software subscription period has begun. The Company has concluded the support is a stand-ready performance obligation that consists of a series of distinct services that are satisfied ratably over time as the services are provided. The Company uses a time-based output method to measure progress because efforts are expended evenly throughout the period given that the nature of the promise is a stand-ready service. The Company recognizes support revenue ratably, typically beginning on the start of the contractual term of the arrangement.

 Cloud-hosted and term-license software subscriptions: In order to determine the stand-alone selling price for the cloud-hosted and term-license software subscriptions, the Company conducts a periodic analysis that requires judgment and considers multiple factors that are reasonably available, and maximizes the use of observable inputs that may vary over time depending upon the unique facts and circumstances related to each performance obligation. To have observable inputs, the Company requires that a substantial majority of the stand-alone selling prices for a product offering fall within a pricing range. If a directly observable stand-alone selling price does not exist, the Company estimates a stand-alone selling price range by reviewing external and internal market factor categories, which may include pricing practices, historical discounting, industry practices, service groups, and geographic considerations. Management believes that these analyses result in an estimate that approximates the price the Company would charge for the performance obligations if they were sold separately.

 The Company's cloud-hosted and term-license software subscription arrangements are generally non-cancellable and do not contain refund provisions. The Company bills for monthly cloud-hosted and term-license software subscriptions on a monthly basis and annually in advance for arrangements with terms of one year or more.

 The price of the cloud-hosted and term-license software subscriptions is generally fixed at contract inception and therefore, the Company's contracts do not contain a significant amount of variable consideration. As a result, the amount of revenue recognized in the periods presented from performance obligations satisfied (or partially satisfied) in previous periods due to changes in the transaction price was not material. The Company's revenue excludes sales and other indirect taxes.

 Accounts Receivable and Related Allowance for Credit Losses

 Accounts receivable are recorded at the invoiced amount, net of allowances for credit losses. The allowance is based upon historical loss patterns, customer credit quality, the age of each past due invoice, and an evaluation of the potential risk of loss associated with delinquent accounts. The allowance also reflects current market conditions and reasonable and supportable forecasts of future economic conditions.

 Activity related to the Company's allowance for credit losses on accounts receivable was as follows (in thousands):

 Balance as of January 31, 2023
 $
 2,014

 Charged to credit loss expense
 1,382

 Write-offs, net of recoveries
 ( 2,014)

 Balance as of January 31, 2024
 $
 1,382

 Charged to credit loss expense
 1,071

 Write-offs, net of recoveries
 ( 1,350)

 Balance as of January 31, 2025
 $
 1,103

 Deferred Revenue

 The Company records contract liabilities to deferred revenue when amounts are invoiced in advance of performance. Deferred revenue consists of the unearned portion of customer billings. The Company's payment terms generally provide for payment within 30 days of the invoice date. Amounts anticipated to be recognized within one year of the balance sheet date are recorded as deferred revenue, current, while the remaining portion is recorded as deferred revenue, non-current in the consolidated balance sheets.

 The Company applied the practical expedient in ASC 606 and did not evaluate contracts of one year or less for the existence of a significant financing component. For contracts with terms of more than a year, the Company has determined its contracts generally do not include a significant financing component as the majority relate to contracts that are billed annually in advance. The primary purpose of the Company's invoicing terms is to provide customers with simplified and predictable ways of purchasing the Company's cloud-hosted software subscriptions, not to receive financing from its customers or to provide customers with financing.

 Deferred Contract Costs

 Deferred contract costs consist of sales commissions earned by the Company's sales force which are considered incremental and recoverable costs of obtaining a contract with a customer. The Company determined that sales commissions that are related to contract renewals are not commensurate with commissions earned on the initial contract. Accordingly, sales commissions for initial contracts are deferred and then amortized on a straight-line basis over a period of benefit that the Company has determined to be four years. The Company determined the period of benefit by taking into consideration its customer contracts, technology, and other factors. Amounts anticipated to be recognized within one year of the balance sheet date are recorded as deferred contract costs, current, while the remaining portion is recorded as deferred contract costs, non-current in the consolidated balance sheets. Deferred contract costs are periodically reviewed for impairment. Amortization of deferred contract costs is included in sales and marketing expense in the consolidated statements of operations.

 Activity related to the Company's deferred contract costs was as follows (in thousands):

 Balance as of January 31, 2023
 $
 46,389

 Additions to deferred contract costs
 18,799

 Amortization of deferred contract costs
 ( 20,568)

 Balance as of January 31, 2024
 $
 44,620

 Additions to deferred contract costs
 22,454

 Amortization of deferred contract costs
 ( 22,008)

 Balance as of January 31, 2025
 $
 45,066

 Amortization expense was $ 22.0 million, $ 20.6 million, and $ 19.2 million for the fiscal years ended January 31, 2025, 2024, and 2023, respectively. There was no impairment loss in relation to the costs capitalized for the periods presented.

 Concentrations of Risk and Significant Customers

 The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, available-for-sale investments, and accounts receivable. All of the Company's cash equivalents and investments are invested in money market funds, U.S. Treasury securities, commercial paper, corporate debt securities, or U.S. Government agency securities that management believes to be of high credit quality. The Company's cash, cash equivalents, and available-for-sale investments are spread across several different financial institutions.

 No single customer accounted for more than 10% of the total accounts receivable balance as of January 31, 2025 or 2024. No single customer represented 10% or more of revenue for the fiscal years ended January 31, 2025, 2024, or 2023.

 Cost of Revenue

 Cost of revenue primarily consists of expenses related to providing the Company's cloud- hosted software subscription to customers, including personnel expenses for operations and global support, payments to the Company's third-party cloud infrastructure providers for hosting the Company's software, payment processing fees, amortization of capitalized software costs, amortization of acquired developed technology, and allocated overhead costs for facilities, information technology, and other allocated overhead costs.

 Foreign Currency Translation

 The functional currency for the large majority of the Company's foreign operations is the U.S. dollar, except for one subsidiary for which the local currency is the functional currency. When a consolidated entity's functional currency is the local currency, the Company translates the foreign functional currency financial statements to U.S. dollars using the exchange rates at the balance sheet date for assets and liabilities, the period average exchange rates for revenue and expenses, and the historical exchange rates for equity. The effects of foreign currency translation adjustments are recorded in other comprehensive income as a component of stockholders' equity and the related periodic movements are presented in the consolidated statements of comprehensive loss. Foreign currency transaction gains and losses are included in other income (expense), net, in the consolidated statements of operations in the period for which they relate. Realized foreign currency transaction gains and losses for the fiscal years ended January 31, 2025, 2024, and 2023 were not material.

 Cash and Cash Equivalents

 Cash and cash equivalents consist of cash on hand, highly liquid investments with original maturities of three months or less from the date of purchase, and money market funds.

 Investments

 The Company's investments are classified as available-for-sale and consist of highly liquid investments, primarily commercial paper, corporate debt securities, U.S. Government agency securities, and U.S. Treasury securities. The Company determines the appropriate classification of its investments at the time of purchase and reevaluates such designation at each balance sheet date.

 The Company periodically evaluates its short-term investments to assess whether those with unrealized loss positions are impaired. The Company considers various factors in determining whether to recognize an impairment charge, including the extent to which the fair value is less than the Company's cost basis, the financial condition of the issuer and any changes thereto, and the Company's intent to sell, or whether it is more likely than not that the Company will be required to sell, the investment before recovery of the investment's amortized cost. If the Company determines that the investment is impaired, an impairment loss is recognized in earnings equal to the difference between the investment's amortized cost and fair value at such date. Realized gains and losses are reported in other income, net, in the consolidated statements of operations. No impairment charges have been recognized to date.

 Available-for-sale investments

 The Company classifies its available-for-sale investments, including those with stated maturities beyond 12 months, as short-term based on their highly liquid nature and because they represent the investment of cash that is available for current operations. In addition, the Company may sell these investments at any time for use in its current operations or for other purposes, even prior to maturity. The Company's available-for-sale investments are recorded at fair market value each reporting period. Unrealized gains and losses on these available-for-sale investments are reported as a separate component of accumulated other comprehensive income in the accompanying consolidated balance sheets until realized.

 Restricted Cash

 The Company has classified cash that is not available for use in its operations as restricted cash. Restricted cash consists of collateral for letters of credit related to security deposits for the Company's office facility lease arrangements. As of January 31, 2025 and 2024, the Company had restricted cash of $ 1.9 million and $ 3.7 million, respectively, all of which was classified as non-current and included in other assets in the consolidated balance sheets.

 Related Party Transactions

 Certain members of the Company's Board of Directors serve as directors of, or are executive officers of, and in some cases are investors in, companies that are customers or vendors of the Company. In the years ended January 31, 2025 and 2024, the Company billed $ 4.0 million and $ 3.8 million, respectively, to entities associated with related parties and recognized revenue from related party transactions of $ 3.6 million and $ 3.3 million respectively. Accounts receivable associated with related parties as of January 31, 2025 and 2024 were not significant. Billings to, revenue recognized from, and accounts receivable associated with, related party transactions for the year ended January 31, 2023 were not significant.

 Property and Equipment, Net

 Property and equipment, net, is stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets, which is generally three to five years. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the assets or the lease term.

 The Company periodically reviews the estimated lives of property and equipment. If the estimated useful life assumption is reduced for any asset, the remaining unamortized balance would be amortized or depreciated over the revised estimated useful life.

 Research and Development Expense

 Research and development expenses consist primarily of personnel costs for the Company's engineering, product, and design teams. Additionally, research and development expenses include contractor fees, depreciation of equipment used in research and development activities, acquisition-related expenses, and allocated overhead costs. Research and development costs are expensed as incurred.

 Capitalized Software Costs

 The Company evaluates costs related to the development of its platform and certain projects for internal use incurred during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred and costs related to the application development stage are capitalized. Capitalized software is amortized on a straight-line basis over its estimated useful life, which is generally three years. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. The Company capitalized $ 9.7 million, $ 7.3 million, and $ 4.8 million related to software costs during the fiscal years ended January 31, 2025, 2024, and 2023, respectively.

 Business Combinations

 The Company applies the acquisition method of accounting for business combinations. Under this method of accounting, all assets acquired and liabilities assumed are recorded at their respective fair values at the date of the acquisition. Determining the fair value of assets acquired and liabilities assumed requires management's judgment and often involves the use of significant estimates and assumptions. These estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the cost savings expected to be derived from acquiring an asset.

 Goodwill, Acquired Intangible Assets, and Impairment of Long-Lived Assets

 Goodwill: Goodwill represents the excess purchase consideration of an acquired business over the fair value of the net tangible and identifiable intangible assets. Goodwill is evaluated for impairment annually in the fourth quarter, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate or a significant decrease in expected cash flows. No impairment charges were recorded during the fiscal years ended January 31, 2025, 2024, or 2023.

 Acquired intangible assets: Acquired intangible assets consist of identifiable intangible assets, primarily developed technology and customer relationships, resulting from the Company's business acquisitions. Intangible assets are recorded at fair value on the date of acquisition and amortized over their estimated useful lives.

 Impairment of long-lived assets: The Company reviews long-lived assets, including property and equipment, net, lease right-of-use assets, capitalized software, and acquired intangible assets for impairment when events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful lives are shorter than originally estimated. The evaluation is performed at the asset group level, which is the lowest level of identifiable cash flows independent of other assets. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets or asset groups are expected to generate. If the carrying value of the assets or asset group is not recoverable, the impairment recognized is measured as the amount by which the carrying value exceeds its fair value. If the Company reduces the estimated useful life assumption for any asset, the remaining unamortized balance would be amortized or depreciated over the revised estimated useful life.

 Advertising Costs

 Advertising costs are expensed as incurred and are included in sales and marketing expense. Advertising costs were $ 9.1 million, $ 9.7 million, and $ 7.3 million for the years ended January 31, 2025, 2024, and 2023, respectively.

 Stock-Based Compensation

 The Company recognizes compensation expense for all stock-based payment awards, including stock options, restricted stock units ("RSUs") and performance and market stock units ("PSUs"), based on the estimated fair value of the award on the grant date.

 The Company estimates the fair value of stock options issued to employees on the date of grant using the Black-Scholes option pricing model, which is impacted by the fair value of the Company's common stock, as well as certain assumptions including the expected volatility over the term of the option awards, the expected term of the awards, risk-free interest rates and the expected dividend yield. Assumptions and estimates used in the determination of the fair value of stock options include expected volatility, expected term, risk-free rate, and expected dividend yield.

 The Company estimates the fair value of RSUs at its stock price on the grant date.

 The Company estimates the fair value of PSUs with performance conditions using the fair value at the date of grant. The fair value may be adjusted over the vesting period based on interim estimates of performance against the performance condition. The fair value for PSUs with market conditions is measured using a Monte Carlo simulation. Expense is recorded over the vesting period under the graded-vesting attribution method.

 The Company estimates the fair value of shares to be issued under its employee stock purchase plan (the "ESPP") on the first day of the offering period using the Black-Scholes valuation model, which is impacted by the fair value of the Company's common stock, as well as certain assumptions including the expected volatility over the term of the offering period, the expected term of the awards, risk-free interest rates, and the expected dividend yield. Assumptions used in the determination of the fair value of awards issued under the ESPP are the same as those used in the determination of the fair value of the Company's stock options.

 The Company generally recognizes compensation expense for employee stock-based payment awards on a straight-line basis over the requisite service period (generally the vesting period of the award), with the exception of PSUs which are recognized using the accelerated attribution method. The Company accounts for forfeitures as they occur.

 Income Taxes

 The Company accounts for income taxes using the asset and liability method. Under this method, the Company recognizes deferred income tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as for net operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. The Company recognizes the deferred income tax effects of a change in tax rates in the period of enactment.

 The Company records a valuation allowance to reduce its deferred tax assets to the net amount that it believes is more likely than not to be realized. The Company considers all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance. Realization of its deferred tax assets is dependent primarily upon future U.S. taxable income.

 The Company recognizes income tax benefits from uncertain tax positions only if it believes that it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such uncertain tax positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. Although the Company believes that it has adequately reserved for its uncertain tax positions (including net interest and penalties), it can provide no assurance that the final tax outcome of these matters will not be materially different. The Company makes adjustments to these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different from the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on its financial position, results of operations, and cash flows.

 Net Loss Per Share

 Basic net loss per share is computed by dividing net loss attributable to PagerDuty, Inc. common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss attributable to PagerDuty, Inc. common stockholders by the weighted-average number of shares of common stock outstanding during the period giving effect to all potentially dilutive securities to the extent they are dilutive. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of stock-based awards as computed under the treasury stock method and convertible notes as computed under the if-converted method. Basic and diluted net loss per share of common stock were the same for each period presented as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive.

 Recently Adopted Accounting Standards

 In November 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU expands public entities' segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment's profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. The Company adopted this ASU in the current year, and applied it retrospectively to all periods presented in its consolidated financial statements herein. Refer to the disclosures above in the section titled "Segment Information" for further details.

 Recent Accounting Pronouncements Not Yet Adopted

 In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

 In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. In January 2025, the FASB issued ASU No. 2025-01 to clarify the effective date of ASU 2024-03. ASU 2024-03 requires that at each interim and annual reporting period, an entity discloses the amounts of certain expenses included in each relevant expense caption. The newly required expense disclosures include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements. The amendment also requires that an entity discloses a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and disclose the total amount of selling expenses and, in annual reporting periods, an entity's definition of selling expenses. This ASU is effective for fiscal years beginning after December 15, 2026. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

 In November 2024, the FASB issued ASU No. 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversion of Convertible Debt Instruments. This ASU clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2025. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

 Note 3. Redeemable Non-Controlling Interest

 In May 2022, the Company established a joint venture, PagerDuty K.K. The Company obtained a 51 % controlling interest and has consolidated the financial results of the joint venture.

 The agreements with the non-controlling interest holders of PagerDuty K.K. contain redemption features whereby the interest held by the non-controlling interest holders is redeemable either: (i) at the option of the non-controlling interest holders; or (ii) at the option of the Company, both beginning on the tenth anniversary of the initial capital contribution. The balance of the redeemable non-controlling interest is reported at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest's share of earnings or losses and other comprehensive income or loss, or its redemption value, which is determined based on a prescribed formula derived from multiple metrics including the annual recurring revenue of PagerDuty K.K. The resulting changes in the estimated redemption amount are recorded with corresponding adjustments against additional paid-in capital due to the absence of retained earnings. The carrying amount of the redeemable non-controlling interest is recorded on the Company's consolidated balance sheets as temporary equity.

 The following table summarizes the activity in the redeemable non-controlling interest for the periods indicated (in thousands):

 2025
 2024

 Balance at beginning of period
 $
 7,293
 $
 1,108

 Investment by redeemable non-controlling interest
 —
 1,781

 Net loss attributable to redeemable non-controlling interest
 ( 801)
 ( 2,178)

 Adjustments to redeemable non-controlling interest
 6,568

 Foreign currency translation adjustments
 —

 Balance at end of period
 $
 18,217
 $
 7,293

 Note 4. Balance Sheet Components

 Cash, Cash Equivalents, and Investments

 Cash, cash equivalents, and investments consisted of the following as of the dates indicated (in thousands):

 2025
 2024

 Cash and cash equivalents:

 Cash
 $
 47,523
 $
 55,736

 Money market funds
 305,283

 —

 —

 Total cash and cash equivalents
 $
 346,460
 $
 363,011

 Available-for-sale investments:

 $
 58,665
 $
 50,036

 7,446
 2,886

 125,811
 131,259

 32,444
 23,997

 Total available-for-sale investments
 $
 $

 The following tables summarize the amortized cost, net unrealized gains (losses), and fair value of the Company's investments by significant investment category as of the dates indicated (in thousands). Gross realized gains or losses from sales of available-for-sale securities were not material for the fiscal years ended January 31, 2025 and 2024.

 Amortized Cost
 Unrealized Gain (Loss), Net
 Estimated Fair Value

 Available-for-sale investments:

 $
 58,620
 $
 $
 58,665

 7,446
 —
 7,446

 125,792
 125,811

 32,441
 32,444

 Total available-for-sale investments
 $
 224,299
 $
 $

 January 31, 2024

 Amortized Cost
 Unrealized Gain (Loss), Net
 Estimated Fair Value

 Available-for-sale investments:

 $
 50,012
 $
 $
 50,036

 2,887
 ( 1)
 2,886

 131,395
 ( 136)
 131,259

 23,983
 23,997

 Total available-for-sale investments
 $
 208,277
 $
 ( 99)
 $

 The following tables present the Company's available-for-sale securities by contractual maturity date as of January 31, 2025 and 2024 (in thousands):

 Amortized Cost
 Fair Value

 Due within one year
 $
 143,797
 $
 143,944

 Due between one to five years
 80,502
 80,422

 Total
 $
 224,299
 $

 January 31, 2024

 Amortized Cost
 Fair Value

 Due within one year
 $
 155,423
 $
 155,158

 Due between one to five years
 52,854
 53,020

 Total
 $
 208,277
 $

 As of January 31, 2025, there were 49 available-for-sale securities in an unrealized loss position with an aggregate fair value of $ 77.2 million, 1 of which was in a continuous unrealized loss position for more than 12 months. The total unrealized loss related to the 1 security was immaterial. As of January 31, 2024, there were 70 available-for-sale securities in an unrealized loss position with an aggregate fair value of $ 108.7 million, 33 of which were in a continuous unrealized loss position for more than 12 months. The total unrealized loss related to the 33 securities was $ 0.2 million.

 When evaluating investments for impairment, the Company reviews factors such as the extent to which fair value has been below cost basis, the financial condition of the issuer and any changes thereto, and the Company's intent to sell, or whether it is more likely than not that the Company will be required to sell, the investment before recovery of the investment's amortized cost. No impairment loss has been recorded on the securities included in the tables above, as the Company believes that any decrease in fair value of these securities is temporary and the Company expects to recover at least up to the initial cost of the investment for these securities. The Company has not recorded an allowance for credit losses, as the Company believes any such losses would be immaterial based on the high-grade credit rating for each of its marketable securities as of the end of each period.

 Property and Equipment, Net

 Property and equipment, net consisted of the following as of the dates indicated (in thousands):

 2025
 2024

 Leasehold improvements
 $
 7,629
 $
 11,334

 Computers and equipment
 7,511
 9,135

 Furniture and fixtures
 3,936
 3,989

 Capitalized software
 27,934
 18,257

 Gross property and equipment (1)

 47,010
 42,715

 Accumulated depreciation and amortization (2)

 ( 25,675)
 ( 25,083)

 Property and equipment, net
 $
 21,335
 $
 17,632

 ______________
 (1) Gross property and equipment includes construction-in-progress for leasehold improvements and capitalized software of $ 9.0 million and $ 4.2 million that had not yet been placed in service as of January 31, 2025 and January 31, 2024, respectively. The costs associated with construction-in-progress are not amortized until the asset is available for its intended use.
 (2) In the year ended January 31, 2024, the Company recorded impairment charges to its leasehold improvements of $ 2.3 million which is described in more detail in Note 16. Restructuring Costs. The impairment charge was recorded in general and administrative expenses on the consolidated statement of operations.

 Depreciation and amortization expense was $ 8.6 million, $ 8.2 million, and $ 6.8 million for the fiscal years ended January 31, 2025, 2024, and 2023, respectively.

 The carrying value of capitalized software was $ 17.7 million and $ 13.1 million as of January 31, 2025 and 2024, respectively.

 Accrued Expenses and Other Current Liabilities

 Accrued expenses and other current liabilities consisted of the following as of the dates indicated (in thousands):

 2025
 2024

 Accrued professional fees
 $
 4,398
 $
 4,483

 Accrued events
 1,908
 1,773

 Accrued hosting and infrastructure
 2,390
 1,843

 Accrued taxes
 3,255
 1,007

 Accrued liabilities, other
 8,371
 6,366

 Accrued expenses and other current liabilities
 $
 20,322
 $
 15,472

 Accrued Compensation

 Accrued compensation consisted of the following as of the dates indicated (in thousands):

 As of January 31,

 2025
 2024

 Accrued bonuses
 $
 11,207
 $
 7,568

 Accrued paid time off
 10,434
 9,466

 Accrued commissions
 5,464
 5,086

 Accrued compensation, other
 10,400
 8,119

 Accrued compensation
 $
 37,505
 $
 30,239

 Note 5. Fair Value Measurements

 The Company measures its financial assets and liabilities at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument's classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value, as follows:

 Level 1—Valuations based on observable inputs that reflect quoted prices for identical assets or liabilities in active markets.
 Level 2—Valuations based on inputs that are directly or indirectly observable in the marketplace.
 Level 3—Valuations based on unobservable inputs that are supported by little or no market activity.

 The following tables present information about the Company's financial assets that are required to be measured or disclosed at fair value using the above input categories as of the dates indicated (in thousands):

 Level 1
 Level 2
 Level 3
 Total

 Money market funds
 $
 $
 —
 $
 —
 $

 —
 58,665
 —
 58,665

 —
 7,446
 —
 7,446

 —
 125,811
 —
 125,811

 —
 32,444
 —
 32,444

 Total
 $
 $
 $
 —
 $
 523,303

 Included in cash equivalents
 $

 Included in investments
 $

 As of January 31, 2024

 Level 1
 Level 2
 Level 3
 Total

 Money market funds
 $
 305,283
 $
 —
 $
 —
 $
 305,283

 —
 51,034
 —
 51,034

 —
 3,880
 —
 3,880

 —
 131,259
 —
 131,259

 —
 23,997
 —
 23,997

 Total
 $
 305,283
 $
 210,170
 $
 —
 $
 515,453

 Included in cash equivalents
 $
 307,275

 Included in investments
 $

 The Company's assets that are measured by management at fair value on a recurring basis are generally classified within Level 1 or Level 2 of the fair value hierarchy.

 The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of January 31, 2025 and 2024, the Company's Level 2 securities are measured at fair value and classified within Level 2 in the fair value hierarchy because the company uses quoted market prices for similar instruments or nonbinding market prices that are corroborated by observable market data or alternative pricing sources and models using market observable inputs to determine fair value.

 The carrying amounts of certain financial instruments, including cash held in banks, accounts receivable, and accounts payable approximate fair value due to their short-term maturities and are excluded from the fair value table above.

 Convertible Senior Notes

 As of January 31, 2025, the estimated fair value of the Company's outstanding 1.25 % Convertible Senior Notes due 2025 (the "2025 Notes") was approximately $ 55.8 million and the estimated fair value of our 1.50 % Convertible Senior Notes due 2028 (the "2028 Notes") was approximately $ 394.3 million. The fair values were determined based on the quoted price for the 2025 Notes and the 2028 Notes (collectively, the "Notes") in an inactive market on the last trading day of the reporting period and are considered as Level 2 in the fair value hierarchy.

 Note 6. Business Combinations

 Year ended January 31, 2025

 The Company did not complete any business combinations in the fiscal year ended January 31, 2025.

 Year ended January 31, 2024

 On November 15, 2023, the Company completed the acquisition of Jeli, Inc. ("Jeli"), a software-as-a-service company that enables customers to effectively collaborate during and after an incident, identify improvement opportunities, and action insights to drive change. The Company acquired 100 % of Jeli for purchase consideration of $ 29.7 million. The acquisition was accounted for as a business combination and total purchase consideration was allocated to the net identifiable tangible and intangible assets and liabilities based on their respective fair values on the acquisition date, with the excess recorded as goodwill. The values assigned to the assets acquired and liabilities assumed may be adjusted during the measurement period of up to 12 months from the date of acquisition as further information becomes available. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. The finalization of the values assigned to the assets acquired and liabilities assumed during the year ended January 31, 2025 did not result in an adjustment to goodwill.

 The purchase price consisted of the following (in thousands):

 Cash
 $
 29,194

 Fair value of replacement stock options attributable to pre-combination service

 Total purchase consideration
 $
 29,688

 The following table presents the fair values of acquired assets and liabilities recorded in the Company's consolidated balance sheet as of the acquisition date (in thousands):

 Cash
 $
 5,123

 Accounts receivable

 Prepaid expenses and other current assets

 Intangible assets
 6,900

 Goodwill
 18,539

 Accrued expenses and other current liabilities
 ( 99)

 Deferred revenue
 ( 1,094)

 Other liabilities
 ( 30)

 Deferred tax liability
 ( 136)

 Total purchase consideration
 $
 29,688

 The goodwill was primarily attributed to the value of synergies created with the Company's current and future offerings. Goodwill is no t deductible for income tax purposes.

 The following table sets forth the components of identifiable intangible assets acquired (in thousands) and their estimated useful lives (in years) as of the date of acquisition:

 Fair Value
 Useful Life

 Developed technology
 $
 6,400

 Customer relationships

 Trademarks

 Total intangible assets
 $
 6,900

 The Company also entered into holdback agreements with the founder of Jeli with $ 1.4 million held back in cash which is subject to the continued service of the founder and thus excluded from the purchase price. This amount is recognized ratably as research and development expense over the required 1.5 year service period.

 As part of the business combination, the Company issued replacement stock option awards for the unvested, in-the-money options of Jeli's continuing employees. The portion of the fair value of the replacement awards that was related to pre-combination vesting was $ 0.5 million and is included as part of the consideration transferred. The post-combination fair value was calculated as the total fair value of the replacement awards less the pre-combination fair value. This post-combination fair value was $ 0.4 million and will be recognized as expense over the remaining service period of the awards.

 Separate from the business combination, the Company issued $ 7.0 million in restricted stock unit awards for continuing employees attributable to post-combination services. The Company will recognize this as stock-based compensation expense over the vesting period of 4 years.

 From the date of the acquisition, the financial results of Jeli have been included in and are not material to the Company's consolidated financial statements. Pro forma revenue and results of operations have not been presented because the historical results are not material to the consolidated financial statements in any period presented.

 The Company did not complete any other business combinations in the fiscal year ended January 31, 2024.

 Note 7. Goodwill and Acquired Intangible Assets

 The changes in the carrying amount of goodwill for the fiscal years ended January 31, 2025 and 2024 are as follows (in thousands):

 Balance as of January 31, 2023

 $
 118,862

 Goodwill resulting from business combination
 18,539

 Balance as of January 31, 2024

 $
 137,401

 Goodwill resulting from business combination
 —

 Balance as of January 31, 2025

 $
 137,401

 Intangible assets subject to amortization consist of the following as of the dates indicated (in thousands, except weighted average remaining useful life):

 Cost
 Accumulated Amortization
 Net
 Weighted Average Remaining Useful Life (Years)

 Customer relationships
 $
 24,800
 $
 ( 10,248)
 $
 14,552
 5.9

 Developed technology
 31,200
 ( 24,927)
 6,273
 3.1

 Trademarks
 ( 460)
 0.8

 Assembled workforce
 2,527
 ( 2,527)
 —
 0.0

 Other intangibles, net
 $
 59,027
 $
 ( 38,162)
 $
 20,865
 5.1

 January 31, 2024

 Cost
 Accumulated Amortization
 Net
 Weighted Average Remaining Useful Life (Years)

 Customer relationships
 $
 24,800
 $
 ( 7,768)
 $
 17,032
 6.9

 Developed technology
 31,200
 ( 16,128)
 15,072
 2.7

 Trademarks
 ( 410)
 1.8

 Assembled workforce
 2,527
 ( 2,105)
 0.3

 Other intangibles, net
 $
 59,027
 $
 ( 26,411)
 $
 32,616
 4.9

 For the fiscal years ended January 31, 2025, 2024 and 2023, amortization expense related to intangible assets was $ 11.8 million, $ 11.5 million, and $ 10.2 million, respectively.

 As of January 31, 2025, expected amortization expense in future periods is as follows (in thousands):

 Year ending January 31,

 2026
 $
 5,217

 2027
 3,760

 2028
 3,760

 2029
 3,493

 2030
 2,480

 Thereafter
 2,155

 Total expected future amortization expense
 $
 20,865

 Note 8. Leases

 Operating Leases

 The Company has entered into various non-cancellable operating leases for its office spaces with lease periods expiring between fiscal 2026 and fiscal 2032. The operating lease agreements generally provide for rental payments on a graduated basis and for options to renew, which could increase future minimum lease payments if exercised.

 Lease right-of-use assets and liabilities are recognized at the lease's commencement date based on the present value of lease payments over the lease term. As the leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The lease right-of-use assets also include any lease payments made and exclude lease incentives such as tenant improvement allowances.

 The Company's operating leases typically include non-lease components such as common-area maintenance costs. The Company has elected a practical expedient that allows it to include non-lease components with lease payments for the purpose of calculating lease right-of-use assets and liabilities, to the extent that they are fixed. Non-lease components that are not fixed are expensed as incurred as variable lease payments.

 Leases with a term of one year or less are not recognized on the consolidated balance sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

 In June 2023, the Company entered into a sublease for a portion of its San Francisco office location. The sublease has a remaining lease term of less than one year. Sublease income, which is recorded as a reduction of rent expense, was not material for the years ended January 31, 2025 and 2024.

 The following table presents information about leases on the consolidated balance sheets as of the dates indicated (in thousands):

 2025
 2024

 Assets:

 Lease right-of-use assets
 $
 6,806
 $
 3,789

 Liabilities:

 Lease liabilities, current
 3,307
 6,180

 Lease liabilities, non-current
 9,637
 6,809

 As of January 31, 2025 and 2024, the weighted average remaining lease term was 3.5 years and 3.2 years, respectively. As of January 31, 2025 and 2024, the weighted average discount rate used to determine the net present value of the lease liabilities was 5.2 % and 3.8 %, respectively.

 The following table presents information about leases on the consolidated statements of operations for the periods indicated (in thousands):

 2025
 2024
 2023

 Operating lease expense
 $
 3,067
 $
 4,736
 $
 5,651

 Short-term lease expense
 2,261
 1,856
 1,842

 Variable lease expense
 1,149
 1,363

 The following table presents supplemental cash flow information about the Company's leases for the periods indicated (in thousands):

 2025
 2024
 2023

 Cash paid for amounts included in the measurement of lease liabilities
 $
 6,647
 $
 6,557
 $
 7,025

 New operating lease right-of-use assets obtained in exchange for lease liabilities

 $
 6,111
 $
 $
 —

 As of January 31, 2025, remaining maturities of lease liabilities are as follows (in thousands):

 2026
 $
 3,849

 2027
 4,047

 2028
 4,172

 2029
 1,974

 2030

 Thereafter
 —

 Gross lease payments
 $
 14,123

 Less: imputed interest
 ( 1,179)

 Total lease liabilities
 $
 12,944

 In the year ended January 31, 2024, the Company recorded an impairment charge to its right-of-use assets of $ 6.1 million. The impairment charges represent the amount by which the carrying value of the right-of-use asset exceeded its estimated fair value. The estimated fair value was based on the present value of the estimated cash flows that could be generated from subleasing the property for the remaining lease term. The impairment charge was recorded in general and administrative expenses on the consolidated statement of operations. There were no impairment charges recorded in the years ended January 31, 2025 and 2023.

 In January 2025, The Company entered into a non-cancelable lease for office space in Atlanta, for which the lessor is the construction agent for certain improvements to be added to the space prior to the Company obtaining economic benefit of the space. The lease will commence for accounting purposes upon completion of the construction, which is expected to be in the first quarter of fiscal 2026. The term of the lease is 92 months. Contractual obligations under the lease are expected to be $ 0.3 million in fiscal 2026, $ 0.4 million in each of fiscal 2027, 2028, 2029, and 2030, and $ 1.3 million thereafter. Upon lease commencement, the lease classification will be determined and the right-of-use asset and lease liability will be recognized on the consolidated balance sheet.

 Note 9. Debt and Financing Arrangements

 2025 Convertible Senior Notes

 In June 2020, the Company issued an aggregate principal amount of $ 287.5 million of 2025 Notes in a private offering pursuant to an indenture dated June 25, 2020 (the "2025 Indenture").

 The 2025 Notes are senior, unsecured obligations of the Company and accrue interest payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2021, at a rate of 1.25 % per year. The 2025 Notes will mature on July 1, 2025, unless such notes are converted, redeemed or repurchased earlier. In October 2023, the Company provided written notice to the trustee and the note holders of the 2025 Notes that it had irrevocably elected to settle the principal amount of its convertible senior notes in cash and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company's election, in respect to the remainder, if any, of the Company's conversion obligation in excess of the aggregate principal amount of the 2025 Notes being converted.

 In October 2023, the Company paid $ 223.7 million to repurchase an aggregate principal amount of $ 230.0 million of the 2025 Notes with a carrying value of $ 227.5 million, net of unamortized issuance costs of $ 2.6 million. As a result, in the year ended January 31, 2024, the Company recorded a gain on partial extinguishment of the 2025 Notes of $ 3.7 million in the consolidated statements of operations.

 2028 Convertible Senior Notes

 In October 2023, the Company issued an aggregate principal amount of $ 402.5 million of convertible senior notes in a private offering pursuant to an indenture dated October 13, 2023 (the "2028 Indenture" and, together with the 2025 Indenture, the "Indentures"). The total net proceeds from the debt offering, after deducting initial purchasers' discounts and debt issuance costs of $ 12.0 million, were $ 390.4 million.

 The 2028 Notes are senior, unsecured obligations of the Company and accrue interest payable semiannually in arrears on April 15 and October 15 of each year, beginning on April 15, 2024, at a rate of 1.50 % per year. The 2028 Notes will mature on October 15, 2028, unless such notes are converted, redeemed or repurchased earlier. Upon conversion, the Company will pay cash up to the aggregate principal amount of the 2028 Notes to be converted and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company's election, in respect to the remainder, if any, of the Company's conversion obligation in excess of the aggregate principal amount of the 2028 Notes being converted, in the manner and subject to the terms and conditions provided in the 2028 Indenture.

 Additional Terms of the Notes

 Holders of the Notes may convert all or any portion of their Notes at their option at any time prior to the close of business on April 1, 2025, with respect to the 2025 Notes, or June 15, 2028, with respect to the 2028 Notes, only under the following circumstances:

 • During any fiscal quarter commencing after the fiscal quarter ended October 31, 2020, with respect to the 2025 Notes, or the fiscal quarter ending January 31, 2024, with respect to the 2028 Notes (and only during such fiscal quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the relevant conversion price on each applicable trading day;
 • During the five business day period after any ten consecutive trading day period (the measurement period) in which the "trading price" (as defined in the relevant Indenture) per $1,000 principal amount of such Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company's common stock and the relevant conversion rate on each such trading day;
 • If the Company calls such Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or
 • Upon the occurrence of specified corporate events, as noted in the Indenture.

 On or after April 1, 2025, with respect to the 2025 Notes, or June 15, 2028, with respect to the 2028 Notes, until the close of business on the second scheduled trading day immediately preceding the relevant maturity date, holders of the Notes may convert all or any portion of their Notes at any time, regardless of the foregoing circumstances.

 The initial conversion rate for the 2025 Notes is 24.95 shares of common stock per $1,000 principal amount of 2025 Notes, which is equivalent to an initial conversion price of approximately $ 40.08 per share of common stock. The initial conversion rate for the 2028 Notes is 36.56 shares of common stock per $1,000 principal amount of 2028 Notes, which is equivalent to an initial conversion price of approximately $ 27.35 per share of common stock. The conversion rate for the Notes is subject to adjustment under certain circumstances in accordance with the terms of the relevant Indenture, but will not be adjusted for accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, or if the Company delivers a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event or convert its notes called (or deemed called) for redemption during the related redemption period (as defined in the relevant Indenture), as the case may be.

 The Company may not redeem the 2025 Notes prior to July 6, 2023 or the 2028 Notes prior to October 20, 2026. The Company may redeem for cash all or any portion of the Notes, at its option, with respect to the 2025 Notes, on a redemption date occurring on or after July 6, 2023 and prior to the 41 st scheduled trading day immediately preceding the maturity date of the 2025 Notes, or with respect to the 2028 Notes, on a redemption date occurring on or after October 20, 2026 and prior to the 61 st scheduled trading day immediately preceding the maturity date of the 2028 Notes, if the last reported sale price of the common stock has been at least 130 % of the relevant conversion price for the Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100 % of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2025 Notes or the 2028 Notes.

 If the Company undergoes a fundamental change (as defined in the relevant Indenture), holders may require the Company to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

 The Indentures governing the Notes contain customary terms and covenants, including that upon certain events of default occurring and continuing, the trustee or the holders of at least 25 % in aggregate principal amount of the outstanding 2025 Notes or 2028 Notes may declare the entire principal of all such 2025 Notes or 2028 Notes plus accrued and unpaid interest to be immediately due and payable.

 Accounting for the Notes

 The Notes are accounted for as a single liability measured at their amortized cost, as no other embedded features require bifurcation and recognition as derivatives. As of January 31, 2025, the 2025 Notes are classified in current liabilities and the 2028 Notes are classified as non-current liabilities. Issuance costs are amortized to interest expense over the contractual term of the Notes at an effective interest rate of 1.91 % for the 2025 Notes and 2.13 % for the 2028 Notes.

 The net carrying amount of the Notes was as follows as of the dates indicated (in thousands):

 As of January 31, 2025
 As of January 31, 2024

 2025 Notes
 2028 Notes
 Total
 2025 Notes
 2028 Notes
 Total

 Principal
 $
 57,500
 $
 402,500
 $
 460,000
 $
 57,500
 $
 402,500
 $
 460,000

 Unamortized issuance costs
 ( 74)
 ( 9,218)
 ( 9,292)
 ( 597)
 ( 11,373)
 ( 11,970)

 Net carrying amount
 $
 57,426
 $
 393,282
 $
 450,708
 $
 56,903
 $
 391,127
 $
 448,030

 Interest expense recognized related to the Notes was as follows for the periods indicated (in thousands):

 2025
 2024
 2023

 Contractual interest expense
 $
 6,629
 $
 4,422
 $
 3,594

 Amortization of debt issuance costs
 2,629
 2,078
 1,839

 Total interest expense related to the Notes
 $
 9,258
 $
 6,500
 $
 5,433

 Capped Call Transactions

 In connection with the offering of the 2025 Notes, the Company entered into privately negotiated capped call transactions (the "2025 Capped Calls") with certain financial institution counterparties. In connection with the offering of the 2028 Notes, the Company entered into separate privately negotiated capped call transactions (the "2028 Capped Calls" and, together with the 2025 Capped Calls, the "Capped Calls"). The Capped Calls are generally intended to reduce or offset the potential dilution to the common stock upon any conversion of the Notes, subject to a cap based on the cap price of such Capped Calls. For accounting purposes, the Capped Calls are separate transactions, and not part of the terms of the Notes. The Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. The costs incurred to purchase the 2025 Capped Calls and the 2028 Capped Calls of $ 35.7 million and $ 55.1 million, respectively, were recorded as a reduction to additional paid-in capital in the accompanying consolidated balance sheets. The Capped Calls will not be remeasured as long as they continue to meet the conditions for equity classification.

 The 2025 Capped Calls each have an initial strike price of approximately $ 40.08 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2025 Notes, and an initial cap price of $ 61.66 per share, subject to certain adjustments. The 2025 Capped Calls cover, subject to anti-dilution adjustments, approximately 7.2 million shares of the Company's common stock. The 2025 Capped Calls are subject to automatic exercise over a 40 trading day period commencing on May 2, 2025, subject to earlier termination under certain circumstances and may be settled in cash, shares of common stock, or a combination of cash and shares of common stock, at the Company's election. The 2025 Capped Calls remain outstanding as of January 31, 2025.

 The 2028 Capped Calls each have an initial strike price of approximately $ 27.35 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2028 Notes, and an initial cap price of $ 42.90 per share, subject to certain adjustments. The 2028 Capped Calls cover, subject to anti-dilution adjustments, approximately 14.7 million shares of the Company's common stock. The 2028 Capped Calls are subject to automatic exercise over a 60 trading day period commencing on July 20, 2028, subject to earlier termination under certain circumstances and may be settled in cash, shares of common stock, or a combination of cash and shares of common stock, at the Company's election. The 2028 Capped Calls remain outstanding as of January 31, 2025.

 Note 10. Commitments and Contingencies

 Contractual Obligations

 The Company's contractual obligations are as follows for the periods presented (in thousands):

 Purchase Commitments(1)

 Senior Convertible Notes(2)

 Total

 2026
 $
 33,188
 $
 63,897
 $
 97,085

 2027
 22,228
 6,038
 28,266

 2028
 16,334
 6,038
 22,372

 2029
 408,538
 408,802

 2030
 —
 —
 —

 Thereafter
 —
 —
 —

 Total contractual obligations
 $
 72,014
 $
 484,511
 $
 556,525

 (1) Primarily relates to contractual third-party services.
 (2) Includes principal and interest payments. For more information regarding the Company's convertible senior notes, refer to Note 9. Debt and Financing Arrangements.

 Refer to Note 8. Leases for a description of the Company's lease-related contractual obligations.

 Legal Matters

 From time to time, the Company may be subject to various claims and other legal matters arising in the ordinary course of business. The Company investigates these claims as they arise and accrues estimates for resolution of legal and other contingencies when losses are probable and estimable. The Company is not currently a party to any material legal proceedings nor is it aware of any pending or threatened litigation that could reasonably be expected to have a material adverse effect on its business, financial condition, results of operations, or cash flows.

 Warranties and Indemnification

 The Company has entered into service-level agreements with a portion of its customers defining levels of uptime reliability and performance and permitting those customers to receive credits if the Company fails to meet the defined levels of uptime. To date, the Company has not experienced any significant failures to meet defined levels of uptime reliability and performance as a result of those agreements and, as a result, the Company has not incurred or accrued any material liabilities related to these agreements in the financial statements.

 In the ordinary course of business, the Company may agree to indemnify customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. As permitted under Delaware law, the Company has entered into indemnification agreements with its directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No demands have been made upon the Company to provide indemnification under such agreements, and there are no claims that the Company is aware of that could have a material effect on its consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive loss, or consolidated statements of cash flows.

 Note 11. Deferred Revenue and Remaining Performance Obligations

 The following table presents the changes to the Company's deferred revenue for the periods indicated (in thousands):

 2025
 2024
 2023

 Deferred revenue, beginning of period
 $
 228,161
 $
 209,051
 $
 170,224

 Billings
 485,090
 448,715
 408,764

 Deferred revenue assumed in business combinations
 —
 1,094

 Revenue recognized
 ( 467,499)
 ( 430,699)
 ( 370,793)

 Deferred revenue, end of period
 $
 245,752
 $
 228,161
 $
 209,051

 Approximately 54 %, 48 %, and 44 % of total revenue recognized in the fiscal years ended January 31, 2025, 2024, and 2023 was from the deferred revenue balances at the beginning of each period.

 The transaction price allocated to the remaining performance obligations represents all future, non-cancelable contracted revenue that has not yet been recognized, inclusive of deferred revenue that has been invoiced and non-cancelable amounts that will be invoiced and recognized as revenue in future periods.

 Beginning in the first quarter of fiscal 2025, the Company began to include contracts with an original term of less than 12 months in this disclosure. Such contracts comprised $ 128 million of remaining non-cancelable performance obligations as of January 31, 2025.

 As of January 31, 2025, total remaining non-cancelable performance obligations under cloud-hosted and term-license software subscription contracts with customers was approximately $ 440 million. Of this amount, the Company expects to recognize revenue of approximately $ 302 million, or 68.6 %, over the next 12 months with the balance to be recognized as revenue thereafter.

 Note 12. Common Stock and Stockholders' Equity

 Common Stock

 The Company has authorized capital stock consisting of 1,000,000,000 shares of common stock as of January 31, 2025 and 2024, with a par value of $ 0.000005 per share. The Company had 91,082,604 and 95,068,187 shares of common stock issued and 91,082,604 and 92,737,185 shares of common stock outstanding as of January 31, 2025 and 2024, respectively.

 Common Stock Repurchases

 In October 2023, the Company repurchased a total of 2,331,002 shares of the Company's common stock through open market purchases at an average per share price of $ 21.45 for a total repurchase price of $ 50.0 million. During the year ended January 31, 2025, these shares were retired.

 In May 2024, the Company's Board of Directors authorized a share repurchase program to repurchase up to $ 100.0 million of the Company's common stock (the "2024 Share Repurchase Program"). Under the 2024 Share Repurchase Program, the Company repurchased a total of 5,223,071 shares of common stock through open market purchases at an average per share price of $ 19.15 for a total repurchase price of $ 100.0 million. During the year ended January 31, 2025, these shares were retired.

 Equity Incentive Plan

 In 2019, the Company adopted the 2019 Equity Incentive Plan (the "2019 Plan"). As of January 31, 2025 and 2024, the Company was authorized to grant up to 36,096,964 shares and 31,519,553 shares of common stock, respectively, under the 2019 Plan.

 The Company currently uses authorized and unissued shares to satisfy stock award exercises and settlement of RSUs and PSUs. As of January 31, 2025 and 2024, there were 20,028,092 shares and 17,178,454 shares, respectively, available for future issuance under the 2019 Plan.

 Shares of common stock reserved for future issuance as of the end of the period noted are as follows:

 Outstanding stock options and unvested RSUs and PSUs
 12,879,148

 Available for future stock option, RSU, and PSU grants
 20,028,092

 Available for ESPP
 3,795,079

 Total common stock reserved for future issuance
 36,702,319

 Stock Options

 A summary of the Company's stock option activity and related information is as follows:

 Number of shares
 Weighted Average Exercise Price
 Weighted Average Remaining Contractual Term (Years)
 Aggregate Intrinsic Value (in thousands)

 Outstanding at January 31, 2024
 4,875,025
 $
 10.29
 4.4
 $
 68,151

 Granted
 —
 $
 —

 Exercised
 ( 620,106)
 $
 6.97

 Forfeited or canceled
 ( 34,287)
 $
 24.17

 Outstanding at January 31, 2025
 4,220,632
 $
 10.67
 3.2
 $
 37,041

 Vested and exercisable as of January 31, 2025
 4,183,325
 $
 10.47
 3.1
 $
 36,997

 The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options on the date of grant and accounts for forfeitures as they occur. The following assumptions were used to calculate the fair value of the Company's stock options granted to employees during the periods indicated:

 2024
 2023

 Expected dividend yield
 —
 —

 Expected volatility
 55.0
 %
 47.1 %

 Expected term (years)
 5.2
 6.1

 Risk-free interest rate
 4.50 % - 4.60 %

 2.50 %

 No stock options were granted during the year ended January 31, 2025. Stock options granted during the years ended January 31, 2024 and 2023 had a weighted average grant date fair value per share of $ 13.00 and $ 16.46, respectively. The aggregate intrinsic value of stock options exercised during the fiscal years ended January 31, 2025, 2024, and 2023 was $ 7.2 million, $ 22.7 million, and $ 50.8 million, respectively.

 As of January 31, 2025, there was approximately $ 0.6 million of total unrecognized compensation cost related to unvested stock options granted under the 2019 Plan, which will be recognized over a weighted average period of 1.0 year.

 Restricted Stock Units

 A summary of the Company's RSU activity and related information is as follows:

 Number of RSUs
 Weighted Average Grant Date Fair Value Per Share

 Outstanding at January 31, 2024
 7,412,056
 $
 31.08

 Granted
 4,831,482
 $
 20.73

 Vested
 ( 3,906,967)
 $
 30.24

 Forfeited or canceled
 ( 1,221,607)
 $
 29.61

 Outstanding at January 31, 2025
 7,114,964
 $
 24.78

 The fair value of the Company's RSUs is expensed ratably over the vesting period, and is based on the fair value of the underlying shares on the date of grant. The Company accounts for forfeitures as they occur.

 As of January 31, 2025, there was $ 167.1 million of unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted average period of 2.1 years based on vesting under the award service conditions.

 Performance Stock Units

 The Company grants PSUs to certain employees of the Company, which, in the current fiscal year, are to vest based on the level of achievement of certain targets related to the Company's operating plan over the one-year performance period. In prior periods, PSUs vested based on both the level of achievement of certain targets related to the Company's operating plan and the relative growth of the per share price of the Company's common stock as compared to the S&P Software & Services Select Index over the one-year performance period. The PSUs vest over a three-year period, subject to continuous service with the Company. The number of shares of the Company's common stock that will vest based on the performance and market conditions can range from 0 % to 200 % of the target amount. Compensation expense for PSUs with performance conditions is measured using the fair value at the date of grant, and may be adjusted over the vesting period based on interim estimates of performance against the performance condition. Compensation expense for PSUs with market conditions is measured using a Monte Carlo simulation approach. Expense is recorded over the vesting period under the graded-vesting attribution method.

 In the year ended January 31, 2025, the Compensation Committee of the Company's Board of Directors certified the results of the Company's operating plan and relative growth of the per share price of the Company's common stock as compared to the S&P Software & Services Select Index for the fiscal year ended January 31, 2024. Based on the results, the PSUs granted in April 2023 ("2023 PSU Awards") were cancelled as the target was not met.

 A summary of the Company's PSU activity and related information is as follows:

 Number of PSUs
 Weighted Average Grant Date Fair Value Per Share

 Outstanding at January 31, 2024
 541,992
 $
 35.08

 Granted(1)

 781,813
 $
 21.62

 Vested
 ( 9,050)
 $
 41.17

 Forfeited or canceled
 ( 65,182)
 $
 35.64

 Performance adjustment for 2023 PSU Awards
 ( 487,834)
 $
 41.88

 Outstanding at January 31, 2025
 761,739
 $
 21.62

 (1)This amount represents awards granted at 100 % attainment.

 During the year ended January 31, 2025, the Company recorded stock-based compensation expense for the number of PSUs considered probable of vesting based on the attainment of the performance targets.

 As of January 31, 2025, total unrecognized stock-based compensation cost related to PSUs was $ 6.6 million. This unrecognized stock-based compensation cost is expected to be recognized using the accelerated attribution method over a weighted-average period of approximately 1.2 years.

 Employee Stock Purchase Plan

 The Company's ESPP generally provides for 24 -month offering periods beginning June 15 and December 15 of each year, with each offering period consisting of four six-month purchase periods. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85 % of the lesser of: (i) the fair market value of the Company's stock as of the beginning of the offering period; or (ii) the fair market value of the Company's stock on the purchase date, as defined in the ESPP.

 The following assumptions were used to calculate the fair value of shares to be granted under the ESPP during the periods indicated:

 2025
 2024
 2023

 Expected dividend yield
 —
 —
 —

 Expected volatility
 38.4 % - 51.9 %

 35.8 % - 60.1 %

 44.1 % - 65.6 %

 Expected term (years)
 0.5 - 2.0

 0.5 - 2.0

 0.5 - 2.0

 Risk-free interest rate
 4.20 % - 5.32 %

 0.69 % - 5.29 %

 0.11 % - 4.62 %

 During the fiscal years ended January 31, 2025, 2024 and 2023, the Company recognized $ 4.8 million, $ 6.0 million, and $ 4.9 million, respectively of stock-based compensation expense related to the ESPP.

 During the fiscal years ended January 31, 2025, 2024 and 2023, the Company withheld $ 8.5 million, $ 10.2 million, and $ 10.0 million, respectively, in contributions from employees.

 In the fiscal years ended January 31, 2025, 2024 and 2023, 502,460, 536,151, and 495,432 shares of common stock, respectively, were issued under the ESPP at a weighted average purchase price of $ 17.89, $ 19.20, and $ 19.93 per share, respectively.

 Stock-Based Compensation

 Stock-based compensation expense included in the Company's consolidated statements of operations was as follows for the periods indicated (in thousands):

 2025
 2024
 2023

 Cost of revenue
 $
 5,984
 $
 7,586
 $
 6,827

 Research and development
 44,691
 44,800
 39,012

 Sales and marketing
 31,185
 30,345
 29,804

 General and administrative
 44,350
 44,421
 34,264

 Total
 $
 $
 $
 109,907

 Note 13. Net Loss per Share

 Net loss used for the purpose of determining basic and diluted net loss per share is determined by taking net loss attributable to PagerDuty, Inc., less the redeemable non-controlling interests redemption value adjustment.

 The following table presents the calculation of basic and diluted net loss per share attributable to PagerDuty, Inc. common stockholders for the periods indicated (in thousands, except number of shares and per share data):

 As of January 31,

 2025
 2024
 2023

 Numerator:

 $
 ( 42,735)
 $
 ( 75,189)
 $

 Less: Adjustment attributable to redeemable non-controlling interest
 6,568
 —

 $
 ( 54,460)
 $
 ( 81,757)
 $

 Denominator:

 Weighted average shares used in calculating net loss per share, basic and diluted (in thousands)
 92,000
 92,341
 88,721

 Net loss per share, basic and diluted, attributable to PagerDuty, Inc. common stockholders
 $
 ( 0.59)
 $
 ( 0.89)
 $
 ( 1.45)

 Since the Company was in a loss position for the periods presented, basic net loss per share and diluted net loss per share are the same, as the inclusion of all potential common stock outstanding would have been anti-dilutive.

 Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows (in thousands):

 As of January 31,

 2025
 2024
 2023

 Shares subject to outstanding common stock awards
 12,097
 12,829
 14,989

 Restricted stock issued to acquire key personnel
 —

 Shares issuable pursuant to the ESPP

 Total

 12,200
 12,959
 15,158

 Additionally, as of January 31, 2023, using the conversion rate of 24.95 shares of common stock per $1,000 principal amount of the 2025 Notes, the potentially dilutive shares that were not included in the diluted per share calculations was 7.2 million.

 As described in Note 9, Debt and Financing Arrangements, upon conversion of the Notes, the Company will pay cash up to the aggregate principal amount of the Notes to be converted and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company's election, in respect to the remainder, if any, of the Company's conversion obligation in excess of the aggregate principal amount of the Notes being converted. As of January 31, 2025 and 2024, the conversion options of the Notes were out of money and as a result, there were no potentially dilutive shares related to the conversion of the Notes.

 Additionally, as described in Note 9, Debt and Financing Arrangements, the Company entered into the Capped Calls, which were not included for purposes of calculating the number of diluted shares outstanding, as their effect would have been anti-dilutive.

 Note 14. Income Taxes

 The components of loss before income taxes were as follows for the periods indicated (in thousands):

 2025
 2024
 2023

 Domestic
 $
 ( 44,009)
 $
 ( 75,375)
 $
 ( 130,971)

 Foreign
 2,256
 ( 2,004)

 Loss before (provision for) benefit from income taxes
 $
 ( 41,753)
 $
 ( 77,379)
 $
 ( 130,064)

 The components of the provision for (benefit from) income tax were as follows for the periods indicated (in thousands):

 2025
 2024
 2023

 Current:

 Federal
 $
 $
 —
 $
 —

 State
 —

 Foreign

 Total current tax expense
 $
 1,869
 $
 $

 Deferred:

 Federal
 $
 —
 $
 ( 97)
 $
 ( 794)

 State
 —
 ( 39)
 ( 536)

 Foreign
 ( 86)
 ( 459)

 Total deferred tax expense
 $
 ( 86)
 $
 ( 595)
 $
 ( 1,106)

 Provision for (benefit from) income taxes
 $
 1,783
 $
 ( 12)
 $
 ( 839)

 A reconciliation of the Company's recorded provision for (benefit from) income tax to the amount of taxes computed at the U.S. statutory rate was as follows for the periods indicated (in thousands):

 2025
 2024
 2023

 Income taxes computed at U.S. federal statutory rate
 $
 ( 8,768)
 $
 ( 16,249)
 $
 ( 27,313)

 State taxes, net of federal benefit
 1,075
 ( 2,029)
 ( 5,044)

 14,760
 8,695

 Foreign rate differential

 Tax credits, net of FIN48 reserves
 ( 1,460)
 ( 1,956)
 ( 1,789)

 Change in valuation allowance
 ( 4,605)
 10,169
 31,350

 Foreign-derived intangible income benefit
 ( 1,039)
 —
 —

 Other
 1,401
 1,103

 Provision for (benefit from) income taxes
 $
 1,783
 $
 ( 12)
 $
 ( 839)

 Deferred income taxes arise from temporary differences between the carrying values of assets and liabilities for financial reporting purposes and income tax reporting purposes, as well as operating losses and tax credit carryforwards.

 Significant components of the Company's deferred tax assets and liabilities were as follows as of the periods indicated (in thousands):

 2025
 2024

 Deferred tax assets:

 Net operating losses
 $
 110,076
 $
 122,343

 Capitalized research and development costs
 46,543
 34,757

 Allowances and accruals
 8,067
 7,374

 9,306
 11,096

 Charitable contributions
 3,983

 Tax credits
 15,032
 14,704

 Lease liabilities
 2,947
 3,262

 Other
 1,311

 Gross deferred tax assets
 $
 192,502
 $
 198,830

 Less: valuation allowance
 ( 172,538)
 ( 177,078)

 Net deferred tax assets
 $
 19,964
 $
 21,752

 Deferred tax liabilities:

 Deferred commissions
 $
 ( 11,067)
 $
 ( 11,565)

 Intangible assets
 ( 9,353)
 ( 11,357)

 Lease assets
 ( 1,445)
 ( 958)

 Other
 ( 582)
 ( 448)

 Gross deferred tax liabilities
 $
 ( 22,447)
 $
 ( 24,328)

 Net deferred tax liabilities
 $
 ( 2,483)
 $
 ( 2,576)

 The realization of deferred tax assets is dependent upon the generation of sufficient taxable income of the appropriate character in future periods. The Company regularly assesses the ability to realize its deferred tax assets and establishes a valuation allowance if it is more likely than not that some portion of the deferred tax assets will not be realized. The Company weighs all available positive and negative evidence, including its earnings history and results of recent operations, scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies. Due to the weight of objectively verifiable negative evidence, including its history of losses in the United States and Japan, the Company believes that it is more likely than not that its U.S., federal and state, and Japan deferred tax assets will not be realized. Accordingly, the Company has recorded a full valuation allowance on such deferred tax assets. The valuation allowance against its various deferred tax assets decreased by $ 4.5 million, increased by $ 14.2 million, and increased by $ 40.8 million during the fiscal years ended January 31, 2025, 2024, and 2023, respectively. The decrease in the Company's valuation allowance compared to the prior year was primarily due to the utilization of U.S. federal and state net operating losses in the current period netted with the increase in U.S. deferred tax assets resulting from capitalization and amortization of research and development expenses.

 As of January 31, 2025, the Company had federal net operating loss carryforwards as reported on the tax return in the amount of $ 404.2 million. Beginning in 2037, $ 5.3 million of the federal net operating losses will begin to expire. The remaining $ 398.9 million will carry forward indefinitely. As of January 31, 2025, the Company had state and foreign net operating loss carryforwards as reported on the tax return in the amount of $ 29.2 million and $ 6.5 million, respectively, which begin to expire in 2028 and 2033, respectively. Utilization of the Company's net operating loss may be subject to annual limitations due to the ownership change limitations provided by section 382 of the Internal Revenue Code and similar state provisions. The Company's net operating loss carryforwards could expire before utilization if subject to annual limitations.

 As of January 31, 2025, the Company had federal, California, and Canadian research and development credit carryforwards as reported on the tax return of $ 15.0 million, $ 7.4 million, and $ 2.3 million, respectively. The federal research and development credits will begin to expire in 2036, the California research and development credits have no expiration, and the Canadian research and development credits will begin to expire in 2042.

 The following table summarizes the activity related to the Company's unrecognized tax benefits for the periods indicated (in thousands):

 2025
 2024
 2023

 Balance at beginning of period
 $
 9,065
 $
 7,723
 $
 6,190

 Additions related to prior years
 —

 Reductions related to prior years
 ( 87)
 ( 192)
 ( 18)

 Additions related to current year
 1,297
 1,424
 1,304

 Additions related to acquired positions
 —
 —

 Balance at end of period
 $
 10,275
 $
 9,065
 $
 7,723

 All of the Company's tax years remain open for examination by U.S. federal and state tax authorities. The non-U.S. tax returns remain open for examination for the years 2017 and onwards. Due to its U.S. federal and state valuation allowance, $ 0.9 million, $ 0.9 million, and $ 1.0 million of unrecognized tax benefits as of January 31, 2025, 2024, and 2023, respectively, would affect the effective tax rate if recognized. The Company recognizes interest and penalties related to unrecognized tax benefits as provision for income taxes. The Company has accrued an immaterial amount of interest and penalties associated with its unrecognized tax benefits noted above as of January 31, 2025. The Company does not anticipate the total amounts of unrecognized tax benefits will significantly decrease in the next 12 months.

 U.S. income tax has not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested outside the United States. As a result of current U.S. tax law, the tax impact of future distributions of foreign earnings would generally be limited to withholding tax from local jurisdictions. The amount of the deferred tax liability on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries is not material.

 Note 15. Geographic Information

 Revenue by location is generally determined by the billing address of the customer. The following table sets forth revenue by geographic area for the periods indicated (in thousands):

 2025
 2024
 2023

 United States
 $
 337,580
 $
 312,165
 $
 283,266

 International
 129,919
 118,534
 87,527

 Total
 $
 $
 $
 370,793

 Other than the United States, no other individual country accounted for 10% or more of revenue for the fiscal years ended January 31, 2025, 2024, or 2023.

 As of January 31, 2025, 69 % of the Company's long-lived assets, including property and equipment and right-of-use lease assets, were located in the United States, 17 % were located in Canada, 12 % were located in Portugal, 1 % were located in the United Kingdom, and 1 % were located in Chile. As of January 31, 2024, 73 % of the Company's long-lived assets, including property and equipment and right-of-use lease assets, were located in the United States, 20 % were located in Canada, 4 % were located in Portugal, 2 % were located in the United Kingdom, and 1 % were located in Chile.
.

 Note 16. Restructuring Costs

 In January 2024, in an effort to rationalize the Company's real estate footprint, the Atlanta leased office spaces began to be decommissioned in order to be vacated. As a result, the Company recorded a $ 7.2 million impairment charge in the period, of which $ 5.3 million related to lease right-of-use-assets and $ 1.9 million related to leasehold improvements. The impairment charge was recorded in general and administrative expenses on the consolidated statement of operations.

 In July 2023, the Company recorded an impairment charge of $ 1.2 million, of which $ 0.4 million related to leasehold improvements and $ 0.8 million related to right-of-use lease assets and liabilities abandoned in the period as a result of the San Francisco office sublease. The impairment charge was recorded in general and administrative expenses on the consolidated statement of operations.

 In January 2023, as part of the Company's ongoing actions to drive efficient growth and expand operating margins, the Company began implementing changes that included reallocating certain roles and realigning teams to continue to improve operational resiliency and agility. The immediate impact was a 7 % reduction in headcount, as some roles were eliminated and new roles created in high-talent, lower-cost geographies. During the fiscal year ended January 31, 2023, the Company incurred costs associated with the restructuring plan of approximately $ 5.0 million, which was primarily comprised of severance payments, employee benefit contributions, and other related costs. In connection with the restructuring, the Company recorded the restructuring costs within the cost of sales, research and development, sales and marketing, and general and administrative operating expense line items of its consolidated statements of operations as of January 31, 2023.

 The Company incurred immaterial additional personnel costs related to the reduction in headcount during the year ended January 31, 2024. The amounts accrued as of January 31, 2023 and the immaterial additional costs incurred during the year ended January 31, 2024 were paid during the year ended January 31, 2024, with no remaining balances accrued as of January 31, 2024.

 Restructuring costs incurred during the year ended January 31, 2025 were not material.

 Note 17. 401(k) Plan

 The Company has a qualified defined contribution plan under Section 401(k) of the Internal Revenue Code covering eligible employees. The 401(k) plan allows each participant to contribute up to an amount not to exceed an annual statutory maximum. The Company is responsible for the administrative costs of the 401(k) plan, and effective January 1, 2022, the employer matching contribution was two percent ( 2 %) of each participant's employee contributions of at least 2 % of eligible wages during the period. During the fiscal years ended January 31, 2025, 2024, and 2023, the Company recognized expense of $ 2.8 million, $ 3.6 million, and $ 2.6 million, respectively, related to matching contributions.

 Note 18. Subsequent Events

 In March 2025, the Company's Board of Directors authorized a share repurchase program for the repurchase of shares of the Company's common stock, in an aggregate amount of up to $ 150.0 million (the "2025 Share Repurchase Program"). The 2025 Share Repurchase Program replaces the Company's 2024 Share Repurchase Program, which was completed in November 2024. Share repurchases under the 2025 Share Repurchase Program may be made from time to time through open market purchases, privately negotiated transactions, or other legally permissible means, including pursuant to Rule 10b5-1 trading plans. The 2025 Share Repurchase Program expires on March 13, 2027 and does not obligate the Company to acquire a specified number of shares, and may be suspended, modified, or terminated at any time, without prior notice. The number of shares to be repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities.

 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 None.

 Item 9A. Controls and Procedures

 Evaluation of Disclosure Controls and Procedures

 Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

 Our management, with the participation and supervision of our chief executive officer and our chief financial officer, have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our chief executive officer and chief financial officer have concluded that as of January 31, 2025, our disclosure controls and procedures were, in design and operation, effective at a reasonable assurance level.

 Management's Report on Internal Control Over Financial Reporting

 Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of January 31, 2025. Our independent registered public accounting firm, PricewaterhouseCoopers LLP, has issued an audit report with respect to our internal control over financial reporting, which appears in Part II, Item 8 of this Annual Report on Form 10-K.

 Limitations on the Effectiveness of Controls

 The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.

 Changes in Internal Control Over Financial Reporting

 There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended January 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 Item 9B. Other Information

 Rule 10b5-1 Trading Arrangements

 On December 13, 2024, Mitra Rezvan, our former Chief Accounting Officer, terminated a trading plan for the sale of the Company's common stock that is intended to satisfy the affirmative defense of Rule 10b5-1(c). The trading plan was adopted on July 10, 2024 and was set to expire on October 10, 2025. The trading plan provided for the sale of up to 60,594 shares of common stock, all of which are subject to the Company's stock price reaching certain price thresholds.

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Not applicable.

 Item 10. Directors, Executive Officers and Corporate Governance

 We maintain a Code of Business Conduct and Ethics applicable to all of our employees, including our Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer, which is a "Code of Ethics for Senior Financial Officers" as defined by applicable rules of the Securities and Exchange Commission ("SEC"). This code is publicly available on our website at www.pagerduty.com. If we make any amendments to this code other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of this code, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies on our website at pagerduty.com or in a Current Report on Form 8-K filed with the SEC.

 The information required by this Item is incorporated by reference to the definitive Proxy Statement for our 2025 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2025.

 Item 11. Executive Compensation

 We have adopted an insider trading policy that governs the purchase, sale, and/or other transactions of our securities by our directors, officers and employees. A copy of our insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

 The remaining information required by this Item is incorporated by reference to the definitive Proxy Statement for our 2025 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2025.

 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 The information required by this Item is incorporated by reference to the definitive Proxy Statement for our 2025 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2025.

 Item 13. Certain Relationships and Related Transactions, and Director Independence

 The information required by this Item is incorporated by reference to the definitive Proxy Statement for our 2025 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2025.

 Item 14. Principal Accounting Fees and Services

 The information required by this Item is incorporated by reference to the definitive Proxy Statement for our 2025 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2025.

 Item 15. Exhibits, Financial Statement Schedules
 (a) The following documents are included as part of this Annual Report on Form 10-K.

 Page

 Report of Independent Registered Public Accounting Firm

 Report of Predecessor Auditor

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Comprehensive Loss

 Consolidated Statements of Stockholders' Equity

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 (b) Exhibits: The exhibits listed in the accompanying index to the exhibits are incorporated by reference or are filed with this Annual Report on Form 10-K, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K).

 Incorporated by Reference

 Exhibit
 Number

 Description
 Form
 File No.
 Exhibit
 Filing Date
 Filed or Furnished Herewith

 2.1
 Agreement and Plan of Reorganization, dated as of September20, 2020, among PagerDuty, Inc., Reef Merger Sub I, Inc., Reef Merger Sub II, LLC, Rundeck, Inc., and Shareholder Representative Services LLC

 2.1
 October 1, 2020

 3.1
 Amended and Restated Certificate of Incorporation of PagerDuty, Inc.

 3.1
 April 15, 2019

 3.2
 Amended and Restated Bylaws of PagerDuty, Inc.

 3.2
 April 15, 2019

 4.1
 Form of common stock certificate of PagerDuty, Inc.

 S-1/A
 333-230323
 4.1
 April 1, 2019

 4.2
 Description of Securities

 4.3
 March 19, 2020

 4.4
 Indenture, dated as of June 25, 2020, between PagerDuty, Inc. and U.S. Bank National Association, as Trustee

 4.1
 June 25, 2020

 4.5
 Form of Global Note, representing PagerDuty, Inc.'s 1.25% Convertible Senior Notes due 2025 (included as Exhibit A to the Indenture filed as Exhibit 4.4)

 4.2
 June 25, 2020

 4.6
 Indenture, dated as of October 13, 2023, by and between PagerDuty, Inc. and U.S. Bank Trust Company, National Association, as Trustee.

 4.1
 October 13, 2023

 4.7
 Form of Global Note, representing PagerDuty, Inc.'s 1.50% Convertible Senior Notes due 2028 (included as Exhibit A to the Indenture filed as Exhibit 4.1)

 4.2
 October 13, 2023

 10.1
 PagerDuty, Inc. 2019 Equity Incentive Plan, as amended, and forms of agreements thereunder

 10.1
 March 17, 2022

 10.2
 Forms of Option Agreement and Restricted Stock Unit Agreement under the 2019 Equity Incentive Plan

 10.1
 June 5, 2020

 10.3
 PagerDuty, Inc. 2019 Employee Stock Purchase Plan

 S-1/A
 333-230323
 10.3
 March 21, 2019

 10.4
 Form of Performance Stock Unit Agreement under the 2019 Equity Incentive Plan

 10.1
 June 4, 2021

 10.5
 Form of Indemnification Agreement entered into by and between PagerDuty, Inc. and each director and executive officer

 S-1
 333-230323

 10.4
 March 15, 2019

 10.7
 Confirmatory Offer Letter by and between PagerDuty, Inc. and Howard Wilson

 S-1/A
 333-230323

 10.6
 April 1, 2019

 10.9
 Offer Letter by and between PagerDuty, Inc. and David Justice

 10.7
 March 19, 2020

 10.11
 PagerDuty, Inc. Cash Incentive Bonus Plan, as amended

 10.11
 March 17, 2022

 10.12

 PagerDuty, Inc. Non-Employee Director Compensation Policy

 X

 10.13
 Form of Confirmation for Capped Call Transactions

 10.1
 June 25, 2020

 10.14
 Lease Agreement, dated September 17, 2015, between PagerDuty, Inc. and Toda America, Inc., as amended

 X

 10.15
 Form of Confirmation for Capped Call Transactions

 10.1
 October 13, 2023

 10.16

 Second Amended and Restated Offer Letter by and between the Company and Jennifer Tejada.

 10.2
 December 1, 2023

 10.17
 Amended and Restated Executive Severance and Change in Control Policy

 10.3
 December 1, 2023

 10.18
 PagerDuty, Inc. Incentive Compensation Recoupment Policy

 10-K/A

 10.18

 March 18, 2024

 16.1
 Letter from Ernst & Young LLP dated April 12, 2024

 001-38857

 16.1

 April 10, 2024

 19.1
 Insider Trading Policy

 X

 21.1
 Subsidiaries of the Registrant

 X

 23.1
 Consent of PricewaterhouseCoopers LLP

 X

 23.2
 Consent of Ernst & Young LLP

 X

 24.1
 Power of Attorney (included on signature page)

 X

 31.1
 Certification of the Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 X

 31.2
 Certification of the Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 X

 32.1*
 Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 X

 101.INS
 X

 101.SCH
 X

 101.CAL
 X

 101.DEF
 X

 101.LAB
 X

 101.PRE
 X

 * The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Annual Report on Form 10-K and will not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.
 Indicates a management contract or compensatory plan.

 Item 16. Form 10-K Summary

 None.

 SIGNATURES
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 (registrant)

 /s/ Jennifer G. Tejada

 Date

 Jennifer G. Tejada

 Chief Executive Officer

 (Principal Executive Officer)

 POWER OF ATTORNEY

 KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jennifer G. Tejada and Owen Howard Wilson, and each of them, as his or her true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for such individual in any and all capacities, to sign any and all amendments to this Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or the individual's substitute, may lawfully do or cause to be done by virtue hereof.

 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons on behalf of the Company and in the capacities and on the dates indicated.

 Signature
 Title
 Date

 /s/ Jennifer G. Tejada

 Chief Executive Officer and Director

 Jennifer G. Tejada
 (Principal Executive Officer)

 /s/ Owen Howard Wilson
 Chief Financial Officer and Principal Accounting Officer (Interim)

 Owen Howard Wilson
 (Principal Financial Officer and Principal Accounting Officer)

 /s/ Teresa Carlson

 Teresa Carlson

 /s/ Sarah Franklin

 Sarah Franklin

 /s/ Elena Gomez

 Elena Gomez

 /s/ William Losch

 William Losch

 /s/ Rathi Murthy

 Rathi Murthy

 /s/ Zachary Nelson

 Zachary Nelson

 /s/ Alex Solomon

 Alex Solomon

 /s/ Bonita Stewart

 Bonita Stewart